Gleason Corporation Has Gathered the Following Data for the Current

question 64

Essay

Gleason Corporation has gathered the following data for the current year:
$$\begin{array} { l l } \text { Net Income } & \$ 40,000 \\\text { Interet Expense } & 5,000 \\\text { Income Tax Expense } & 12,500 \\\text { I’referred Dividends } & 3,600\end{array}$$ $\begin{array}{lll}&\text {Beginning}& \text {End of }\\&\text {of Year}& \text {Year}\\\text { Current assets } & \$ 68,000 & \$ 81,000 \\\text { Current liabilities } & 41,000 & 39,000 \\\text { Property, plant, and equipment } & 340,000 & 365,000 \\\text { Long-term liabilities } & 100,000 & 90,000 \\\text { Common shareholders' equity } & 217,000 & 267,000 \\\text { Preferred shareholders' equity } & 50,000 & 50,000\end{array}$
a_Calculate the current ratio at year end.
b_Calculate return on assets.
c_Calculate return on equity.
d_Comment on how these measures are used.

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Definitions:

Consumer Surplus

The variance between the amount consumers are ready to spend on a good or service and the actual amount they pay.

Efficiency

The degree to which resources are used effectively and waste is minimized, often aiming at maximizing output from given inputs.

Highest-value Bidder

The participant in an auction willing to pay the most for the item up for bid.

English Auction

A public sale method where bids are openly made and raised until no higher bid is offered, with the highest bidder purchasing the item.