please help answer questions 510 Use the following to answer

please help answer questions 5-10!!

Use the following to answer questions 1-15: Table 5-1 Income Statement Balance Sheet Sales $20,000,000 Assets: Cash Marketable Securities 12,500,000 Accounts Receivable, net 2,500,000 Inventory Prepaid Expenses Plant & Equipment30000000 Cost of Goods Sold 8,000,000 $5,000,000 12,000,000 Selling and Administrative 1,600,000 Depreciation Interest Taxes (40%) Common Stock Div. 3,000,000 7,400,000 2.000,000 5,400,000 2.160,000 3,240,000 600,000 30,000,000 5,000,000 Total Assets 85,000 00 Liabilities and Equity: Accounts Payable Notes Payable Accrued Expenses Bonds Payable Common Stock Cepital in Excess of Per Retained Earnings $2,640,000 $20,000,000 5,000,000 5,000,000 25,000,000 5,000,000 10,000,000 5,000,000 Total Liabilities and Equity $85000 000 Shares outstending of common stock- 1,000,000 Market price of common stock $18. 1. The Current Ratio is: A) 0.55 B) 1.83 C) 0.183 D) 0.35 2. The Net Profit margin is: A) B) C) D) 16.2% 37% 60% 13.7% 3. The Quick Ratio is: A) 0.83 B) 1.20 C) 8.33 D) 0.29

Solution

5. EPS = Earnings available to common shareholders/weighted average shares outstanding

= $3,240,000/1,000,000 = $3.24

Hence, Option \"B\" is correct.

6. Gross Profit Margin = (Revenue - COGS)/Revenue = $12,000,000/$20,000,000 = 0.6, or 60%

Hence, option \"B\" is correct.

7. Total Debt to Total Asset Ratio = Total Debt/Total Asset

= ($20,000,000 + $5,000,000 + $5,000,000 + $25,000,000)/$85,000,000

= $55,000,000/$85,000,000 = 0.647

Hence, option \"C\" is correct.

8. Return on Assets = Net Income/Total Assets = $3,240,000/$85,000,000 = 0.0381 or 3.81%

Hence, option \"B\" is correct.

9. Total Asset Turnover Ratio = Revenue/Total Asset = $20,000,000/$85,000,000 = 0.235 times

Hence, option \"A\" is correct.

10. Operating Profit Margin = Operating Profit/Revenue = $7,400,000/$20,000,000 = 0.37, or 37%

Hence, Option \"D\" is correct.