Question:Recent financial statements for Madison Company follow:Madison CompanyBalance SheetJune 30 Assets Current assets: Cash$18,000 Accounts receivable, net200,000 Merchandise inventory370,000 Prepaid expenses12,000 Total current assets600,000 Plant and equipment, net870,000 Total assets$1,470,000 Liabilities and Stockholders’ Equity Liabilities: Current liabilities$290,000 Bonds payable, 10%390,000 Total liabilities680,000 Stockholders’ equity: Common stock, $5 par value$180,000 Retained earnings610,000 Total stockholders’ equity790,000 Total liabilities and stockholders’ equity$1,470,000Madison CompanyIncome StatementFor the Year Ended June 30 Sales$2,590,000 Cost of goods sold1,462,000 Gross margin1,128,000 Selling and administrative expenses590,000 Net operating income538,000 Interest expense39,000 Net income before taxes499,000 Income taxes149,700 Net income$349,300 Account balances at the beginning of the company’s fiscal year were: accounts receivable, $170,000; and inventory, $310,000. All sales were on account.Required:Compute financial ratios as follows:1.Gross margin percentage. (Round your answer to the nearest whole percent.) Gross margin percentage % 2.Current ratio. (Round your answer to 2 decimal places.) Current ratio 3.Acid-test ratio. (Round your answer to 2 decimal places.) Acid-test ratio 4.Average collection period. (Use 365 days in a year. Round your answer to 1 decimal place.) Average collection period days 5.Average sale period. (Use 365 days in a year. Do not round intermediate calculations. Round your final answer to 1 decimal place.) Average sale period days6.Debt-to-equity ratio. (Round your answer to 2 decimal places.) Debt-to-equity ratio 7.Times interest earned. (Round your answer to 1 decimal place.) Times interest earned 8.Book value per share. (Round your answer to the nearest dollar amount.) Book value per share$
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