Maurice Tutor
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The comparative financial statements of Vision International, Inc., are as follows. The market
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                                                   price of Vision International, Inc., common stock was $20 on December 31,  2007.
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 |
 2007 |
 |
 2006 |
|
Net sales |
$1,050,000 |
 |
$960,000 |
|
Cost of goods sold |
    400,000 |
 |
  390,000 |
|
Gross profit |
$ Â 650,000 |
 |
$570,000 |
|
Selling expenses |
$Â Â 270,000 |
 |
$275,000 |
|
Administrative expenses |
    195,000 |
 |
  165,000 |
|
Total operating expenses |
$Â Â 465,000 |
 |
$440,000 |
|
Income from operations |
$Â Â 185,000 |
 |
$130,000 |
|
Other income |
      20,000 |
 |
    15,000 |
|
 |
$Â Â 205,000 |
 |
$145,000 |
|
Other expense (interest) |
      96,000 |
 |
    48,000 |
|
Income before income tax |
$ Â 109,000 |
 |
$ 97,000 |
|
Income tax expense |
      41,000 |
 |
    30,000 |
|
Net income |
$Â Â Â Â 68,000 |
 |
$ Â 67,000 |
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|
Assets Current assets: Cash |
  $  165,000 |
 |
  $  126,000 |
|
Marketable securities |
398,000 |
 |
254,000 |
|
Accounts receivable (net) |
199,000 |
 |
165,000 |
|
Inventories |
84,000 |
 |
52,000 |
|
Prepaid expenses |
      25,000 |
 |
       18,000 |
|
Total current assets |
$Â Â 871,000 |
 |
$Â Â 615,000 |
|
Long-term investments |
300,000 |
 |
200,000 |
|
Property, plant, and equipment (net) |
  1,040,000 |
 |
     760,000 |
|
Total assets |
$2,211,000 |
 |
$1,575,000 |
|
Liabilities Current liabilities |
 $  290,000 |
 |
 $  250,000 |
|
Long-term liabilities: Mortgage note payable, 8%, due  2012 |
 $  300,000 |
 |
 — |
|
Bonds payable, 12%, due  2016 |
600,000 |
 |
$Â Â 400,000 |
|
Total long-term liabilities |
$Â Â 900,000 |
 |
$Â Â 400,000 |
|
Total liabilities |
$1,190,000 |
 |
$Â Â 650,000 |
|
Stockholders’ Equity Preferred $6 stock, $100 par |
 $  250,000 |
 |
 $  200,000 |
|
Common stock, $10 par |
350,000 |
 |
350,000 |
|
Retained earnings |
421,000 |
 |
375,000 |
|
Total stockholders’ equity |
$1,021,000 |
 |
$Â Â 925,000 |
|
Total liabilities and stockholders’  equity |
$2,211,000 |
 |
$1,575,000 |
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Instructions
Determine the following measures for 2007, rounding to one decimal  place:
1.    Working capital
2.    Current ratio
3.    Quick ratio
4.    Accounts receivable turnover
5.    Number of days’ sales in receivables
6.    Inventory turnover
7.    Number of days’ sales in inventory
8.    Ratio of fixed assets to long-term liabilities
9.    Ratio of liabilities to stockholders’ equity
10.    Number of times interest charges earned
11.    Asset turnover
12.    Rate earned on total assets
13.    Rate earned on stockholders’ equity
14.    Earnings per share on common stock
15.    Price-earnings ratio
16.    Dividends per share of common stock
17.    Dividend yield
18.    DuPont formula
19.    Leverage formula
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