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Acc 300 Problem Set 2

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Problem Set II

P2-6A A. Earnings per share. | | Earnings per share = Net income/Average No. of outstanding shares | | 2011-$2.00 = 60,000/30,0002012- $2.12=70,000/33,000 | | B. Working capital. | | Working capital = current assets - current liabilities | | 2011- 85,000 = 155,000-70,0002012- 113,000 = 188,000- 75,000 | | C. Current ratio. | | Current ratio = Current assets/Current liability | | 2011 :2.2 =155,000/70,0002012: 2.5 = 188,000/75,000 | | D. Debt to total assets ratio. | | | | Debt to total asset ratio = Total debt/Total assets | | 2011- 23.4% = 160,000/685,0002012- 20.4% = 155,000/760,000 | | E. Free cash flow. | | Free cash flow = Cash from operating activities-Cash used for cap. Exp.-Dividends | 2011- 3,0002012-17,000 | | F.) Based on the ratios calculated, discuss briefly the improvement or lack thereof in | Financial position and operating results from 2011 to 2012 of Sievert Corporation. | | | There was an increase of net income and earnings per share in which showed the growth of the company. The liquidity showed in the working capital and ratio. The solvency improved the debt of total assets ratio and the free cash flow | | | | |
P13-2A
A. Earnings per share: Earnings per share = Net income/Average No. of outstanding shares $218,000/59,000 = $3.69
No. of outstanding share for 2012 = 290,000/5: 58000
No. of outstanding share for 2011 = 300,000/5: 60000
Average no. of outstanding share = 58,000+60,000/2: 590000
B. Return on common stockholders’ equity. ROE = Net income/Average total stockholders’ equity
218,000/534400 = 40.8%
Average total stockholders’ equity = 603,400+465,400/2: 534400
A. Return on assets. Return on assets = Net income/Average total assets
218,000/939850 = 23.2%
Average total assets = 1,026,900+852,800/2:939850

D. Current ratio.…...

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