Hyrkas Corporations most recent balance sheet and income sta

Hyrkas Corporation\'s most recent balance sheet and income statement appear below: 6 Balance Sheet December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets 02:51:23 Current assets: Cash Accounts receivable, net Inventory Prepaid expenses $ 210 340 310 20 880 1,120 $2,000 310 360 280 20 970 1,220 $2,190 Total current assets Plant and equipment, net Total assets Liabilities and Stockholders\' Equity Current liabilities: $ 280 310 50 40 400 440 840 Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Bonds payable Total liabilities Stockholders\' equity: 50 40 370 270 640 Common stock, $2 par value Additional paid-in capital Retained earnings 200 330 830 1,360 $2,000 200 330 820 1,350 $2,190 Total stockholders\' equity Total liabilities & stockholders\' equity

Solution

A) Gross Margin percentage:

Formula: [Total Sales - Cost of goods sold] / Total Sales

Calculation: [1490-940] / 1490 = 36.9%

B) Earnings per share:

Formula: Profit after Tax / Number of common stock holders

Calculation: 52000/100000 = $0.52

C) Price Earnings Ratio

Formula : Market price of share / Earnings per share

Calculation: $11.20 / $0.52 = 21.5

D) Dividend payout ratio

Formula: Dividend per share / Earnings per share

Calculation: [$42000/1,00,000] / 0.52 = 80.8%

E) Dividend Yield ratio

Formula: Dividend per share / Current share price

Calculation: 0.42/11.2 = 3.75%

F) Return on total assets

Formula : Annual Net Income / Average Total assets

Calculation: 52 / [(2000 + 2190) / 2] = 2.48%

G) Return on Equity:

Formula: Annual Net Income / Average stockholders equity

Calculation: 52 / [(1350+1360) / 2] = 3.84%

H) Book value per share

Formula: Stockholders Equity / Number of common shares

Calculation: 1360000 / 100000 = 13.6

I) Working Capital

Formula: Current Assets - Current liabilities

Calculation: $880000 - $370000 = $510000

J) Current ratio

Formula: Current Assets / Current Liabilities

Calculation: 880/370 = 2.38

K) Acid test ratio

Formula: (Current Assets - Inventories) / Current liabilities

Calculation: (880 - 310) / 370 = 1.54

L) Accounts receivable turnover:

Formula: Net Credit Sales / Average Accounts Receivable

Since sales is given as all on account we consider that as net credit sales.

Calculation: 1490 / [(340+360) / 2] = 4.26

M) Average collection period:

Formula: 365 / accounts receivable turnover

Calculation: 365/4.26 = 85.7 Days

N) Inventory Turnover

Formula: Cost of goods Sold / Average Inventories

Calculation: 940 / [(310+280)/2] = 3.19

O) Average sale period:

Formula : [365 / Purchases * Average Inventories]

Purchases = Cost of goods sold - opening stock + closing stock = 940 - 280 + 310 = 970

Calculation: 365/970*295 = 111 Days

P) Times interest earned ratio:

Formula: Earning before Interest & Tax / Total Interest Payable

Calculation: 95 / 20 = 4.75

Q) Debt to equity ratio:

Formula: Total Libilities / Stockholders equity

Calculation: 640 / 1360 = 0.47

Notes: Average means [(opening balance) + (closing balance)] / 2

PS: Please use \"Thums Up\" if you were contented with my solution and presentation