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The Financial Statements of Hainz Company Appear Below Additional Information:
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question 48

Essay

The financial statements of Hainz Company appear below:  Liabilities and stockholders’ equity Accounts payable $20,000$30,000 Short-term notes payable40,00090,000 Bonds payable 80,000160,000 Common stock 150,000150,000 Retained earnings110,00070,000 Total liabilities and stockholders’ equity $400,000$500,000\begin{array}{lcc} \text { Liabilities and stockholders' equity}\\ \text { Accounts payable } & \$ 20,000&\$30,000 \\ \text { Short-term notes payable} & 40,000 &90,000\\ \text { Bonds payable } & 80,000 &160,000\\\text { Common stock } & 150,000&150,000 \\\text { Retained earnings} & 110,000&70,000 \\\text { Total liabilities and stockholders' equity }&\$400,000&\$500,000\end{array}  Net sales $400,000Cost of goods sold 250,000 Gross profit150,000 Expenses Operating expenses $42,000 Interest expense 18,000 Total expenses 60,000Income before income taxes 90,000 Income tax expense27,000 Net income.$63,000\begin{array}{llr} \text { Net sales } &&\$400,000\\ \text {Cost of goods sold } &&250,000\\ \text { Gross profit} &&150,000\\ \text { Expenses} &\\ \text { Operating expenses } &\$42,000\\ \text { Interest expense } &18,000\\ \text { Total expenses } &&60,000\\ \text {Income before income taxes } &&90,000\\ \text { Income tax expense} &&27,000\\ \text { Net income.} &&\$63,000\\\end{array}

Additional information:
a. Cash dividends of $23,000\$ 23,000 were declared and paid in 2017 .
b. Weighted-average number of shares of common stock outstanding during 2017 was 30,000 shares.
c. Market value of common stock on December 31, 2017, was $21\$ 21 per share. Instructions
Using the financial statements and additional information compute the following ratios for Hainz Company for 2017. Show all computations.
Computations
1. Current ratio _________.
2. Return on common stockholders' equity _________.
3. Price-earnings ratio _________.
4. Acid-test ratio _________.
5. Accounts receivable turnover _________.
6. Times interest earned _________.
7. Profit margin _________.
8. Days in inventory _________.
9. Payout ratio _________.
10. Return on assets _________.


Definitions:

Forehead

The part of the human face above the eyebrows and below the hairline, associated with the frontal bone of the skull.

Clavicle

A long bone that serves as a strut between the shoulder blade and the sternum or breastbone, commonly known as the collarbone.

Appendicular

Relating to limbs and their attachments to the axial skeleton.

Sphenoid Bone

A butterfly-shaped bone that forms part of the skull base, contributing to the orbits, nasal cavity, and housing the pituitary gland.

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