Ratio computation. The financial statements of the Lone Pine Company follow.

Ratio computation. The financial statements of the Lone Pine Company follow.

LONE PINE COMPANY

Comparative Balance Sheets

December 31, 20X2 and 20X1 ($000 Omitted)

20X2

20X1

Assets

Current Assets

Cash and Short-Term Investments

$ 400

$ 600

Accounts Receivable (net

3,000

2,400

Inventories

2,000

2,200

Total Current Assets

$5,400

$5,200

Property, Plant, and Equipment

Land

$1,700

$ 600

Buildings and Equipment (net)

1,500

1,000

Total Property, Plant, and Equipment

$3,200

$1,600

Total Assets

$8,600

$6,800

Liabilities and Stockholders’ Equity

Current Liabilities

Accounts Payable

$1,800

$1,700

Notes Payable

1,100

1,900

Total Current Liabilities

$2,900

$3,600

Long-Term Liabilities

Bonds Payable

4,100

2,100

Total Liabilities

$7,000

$5,700

Stockholders’ Equity

Common Stock

$ 200

$ 200

Retained Earnings

1,400

900

Total Stockholders’ Equity

$1,600

$1,100

Total Liabilities and Stockholders’ Equity

$8,600

$6,800

LONE PINE COMPANY

Statement of Income and Retained Earnings

For the Year Ending December 31,20X2 ($000 Omitted)

Net Sales*

$36,000

Less: Cost of Goods Sold

$20,000

Selling Expense

6,000

Administrative Expense

4,000

Interest Expense

400

Income Tax Expense

2,000

32,400

Net Income

$ 3,600

Retained Earnings, Jan. 1

900

$ 4,500

Cash Dividends Declared and Paid

3,100

Retained Earnings, Dec. 31

$ 1,400

*All sales are on account.

Instructions

Compute the following items for Lone Pine Company for 20X2, rounding all calculations to two decimal places when necessary:

a. Quick ratio

b. Current ratio

c. Inventory-turnover ratio

d. Accounts-receivable-turnover ratio

e. Return-on-assets ratio

f. Net-profit-margin ratio

g. Return-on-common-stockholders’ equity

h. Debt-to-total assets

i. Number of times that interest is earned

j. Dividend payout rate

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