The financial statements of Hainz Company appear below HAINZ COMPANY Comparative Balance Sheet December 31, Assets Cash... Short-term investments Accounts receivable (net)... Inventory Property, plant and equipment (net) $ 40,000 60,000 30,000 0,000 260,000 300000 400.000 $500.000 20,000 20,000 40,000 60,000 ... Total assets... Liabilities and stockholders\' equity Accounts payable Short-term notes payable. Bonds payable. $ 20,000 40,000 80,000 150,000 30,000 90,000 160,000 150,000 Common stock Retained earnings Total liabilities and stockholders\' equity. $400,000 $500.000 HAINZ COMPANY Income Statement For the Year Ended December 31, 2017 $400,000 t sales Cost of goods sold. Gross profit. Expenses 250,000 150,000 Operating expenses Interest expense $42,000 18,000 Total expenses 90,000 ncome before income taxes... ncome tax expense et income $ 63.000 Weighted-average number of shares of common stock outstanding during 2017 was 30.0 shares Cash dividends of $23,000 were declared and paid in 2017 Market value of common stock on December 31, 2017, was $21 per share Solution 1 Current Ratio = Current Asset / Curret Liability = =140000/60000 = 2.33 2 Accounts receivable turnover ratio = the net credit sales/ average accounts receivable = $400000/$35000 11.42857 times 3 accounts collection period = 365/Accounts receivable turnover ratio =365/11.42857 31.9375 days 4 Inventoy Turnover Ratio = Cost of Goods Sold/Average Inventory = $2,50,000/$65000 3.846154 times 5 Average day to sell inventory = Inventory/Cost of Sales *365 =60000/250000*365 87.6 days 6 Times Interest Earned = (Income before taxes and interest)/interest expense = ($90000+18000)/18000 6.00 times 7 Profit Margin = Net Income / Sales = 63000/400000 15.75% 8 Asset Turnover = Sales or Revenues / Total Assets = $400000/400000 1 times 9 Debt to asset ration = Total Liability / Total asset = $140000/$400000 0.35 10 Return on asset ratio = Net Income/Averge total asset = 63000/450000 14% WORKING total current assets = total assets - Net property, plant, equipment = $400000-$260000 = $140000 Total current liabilities = [accounts payable + notes payable] $20000 + 40000 = $60000 Average Account Receivable = (Opening Debtors+Closing Debtors)/2 = ($30000+$40000)/2 = $35000 Average Inventory = (Opening Inventory+Closing Inventory)/2 = ($70000+$60000)/2 = $65000 Long-term debt + Equity = Total liabilities and equity – Total current liablities = $275.00 – 65 = $201.00 Total liability = Accounts Payable+ Notes Payable+Bonds Payable = $20000+40000+80000 = 140000 Average Total asset = (Total opening asset+ total closing asset)/2 = ($400000+$500000)/2 = $4,50,000.

1. The financial statements of Hainz Company appear below HAINZ COMPANY Comparative
Balance Sheet December 31, Assets Cash... Short-term investments Accounts receivable (net)...
Inventory Property, plant and equipment (net) $ 40,000 60,000 30,000 0,000 260,000 300000
400.000 $500.000 20,000 20,000 40,000 60,000 ... Total assets... Liabilities and stockholders'
equity Accounts payable Short-term notes payable. Bonds payable. $ 20,000 40,000 80,000
150,000 30,000 90,000 160,000 150,000 Common stock Retained earnings Total liabilities and
stockholders' equity. $400,000 $500.000 HAINZ COMPANY Income Statement For the Year
Ended December 31, 2017 $400,000 t sales Cost of goods sold. Gross profit. Expenses 250,000
150,000 Operating expenses Interest expense $42,000 18,000 Total expenses 90,000 ncome
before income taxes... ncome tax expense et income $ 63.000 Weighted-average number of
shares of common stock outstanding during 2017 was 30.0 shares Cash dividends of $23,000
were declared and paid in 2017 Market value of common stock on December 31, 2017, was $21
per share
Solution
1 Current Ratio = Current Asset / Curret Liability = =140000/60000 = 2.33
2 Accounts receivable turnover ratio = the net credit sales/ average accounts
receivable = $400000/$35000 11.42857 times 3 accounts collection period
= 365/Accounts receivable turnover ratio =365/11.42857 31.9375 days 4
Inventoy Turnover Ratio = Cost of Goods Sold/Average Inventory = $2,50,000/$65000
3.846154 times 5 Average day to sell inventory = Inventory/Cost of Sales *365
=60000/250000*365 87.6 days 6 Times Interest Earned = (Income before taxes
and interest)/interest expense = ($90000+18000)/18000 6.00 times 7
Profit Margin = Net Income / Sales = 63000/400000 15.75% 8 Asset
Turnover = Sales or Revenues / Total Assets = $400000/400000 1 times
9 Debt to asset ration = Total Liability / Total asset = $140000/$400000 0.35
10 Return on asset ratio = Net Income/Averge total asset = 63000/450000 14%
WORKING total current assets = total assets - Net property, plant, equipment =
$400000-$260000 = $140000 Total current liabilities = [accounts payable + notes payable]
$20000 + 40000 = $60000 Average Account Receivable = (Opening Debtors+Closing
Debtors)/2 = ($30000+$40000)/2 = $35000 Average Inventory = (Opening Inventory+Closing
Inventory)/2 = ($70000+$60000)/2 = $65000 Long-term debt + Equity = Total liabilities and
equity – Total current liablities = $275.00 – 65 = $201.00 Total liability = Accounts Payable+
Notes Payable+Bonds Payable = $20000+40000+80000 = 140000 Average Total asset = (Total
opening asset+ total closing asset)/2 = ($400000+$500000)/2 = $4,50,000