Use the Following Information to Calculate the Ratios Requested Below

question 152

Essay

Use the following information to calculate the ratios requested below.Round answers to two decimal places.Show your work.

$$\begin{array} { l r } \text { Average inventory } & \$ 6,000 \\\text { Average total assets } & 80,000 \\\text { Cost of goods sold } & 21,000 \\\text { Income taxes expense } & 3,600 \\\text { Interest expense } & 2,000 \\\text { Net income } & 4,800 \\\text { Net sales } & 40,000 \\\text { Market price, December 31, on 2,000 shares } & \$ 36 / \text { share }\end{array}$$
$\begin{array}{|l|l|l|l|}\hline \text { Return on assets } && \text { Inventory turnover } & \\\hline \text { Price/earnings }(\mathrm{P} / \mathrm{E}) \text { ratio } && \text { Interest coverage ratio } & \\\hline\end{array}$

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor costs.

Work in Process Inventory

Goods that are partially completed in manufacturing but not yet ready for sale, reflecting a stage between raw materials and finished goods.

Supplies Inventory

Items held in stock by a business, such as office supplies or maintenance materials, not directly used in manufacturing but necessary for operations.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor.