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question selected information from the comparative financial statementsof zz tire co 4291070

Question

Selected information from the comparative financial statementsof ZZ Tire Company for the year ended December 31, appears below:(Points will not be awarded unless you show work)

 

2014

 

2013

Accounts receivable (net)

$    180,000

 

$200,000

Inventory

140,000

 

160,000

Total assets

1,200,000

 

800,000

Current liabilities

140,000

 

110,000

Long-term debt

400,000

 

300,000

Net credit sales

1,330,000

 

700,000

Cost of goods sold

900,000

 

530,000

Interest expense

50,000

 

25,000

Income tax expense

60,000

 

29,000

Net income

150,000

 

85,000

There is no preferred stock and the tax rate is 30%.

Required:

Calculate each of the following for 2014:

a.       Debt ratio

b.      Debt-to-equity ratio

c.       Times interest earnedratio

d.      Gross margin percentage

e.      Return on assets

f.        Return on commonstockholders? equity

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