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Using the financial statements for the Goodyear Calendar Company, calculate the 13 basic ratios found in the chapter.
Using the financial statements for the Goodyear Calendar Company, calculatethe 13 basic ratios found in the chapter.GOODYEAR CALENDAR COMPANYBalance SheetDecember 31, 2008AssetsCurrent assets:Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,000Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000Accounts receivable (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180,000Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 370,000Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000Plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450,000Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . (100,000)Net plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,000Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 760,000GOODYEAR CALENDAR COMPANYLiabilities and Stockholders’ EquityCurrent liabilities:Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 90,000Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000Accrued taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,000Long-term liabilities:Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,000Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280,000Stockholders’ equityPreferred stock, $100 par value . . . . . . . . . . . . . . . . . . . . . . . . 90,000Common stock, $1 par value . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000Capital paid in excess of par . . . . . . . . . . . . . . . . . . . . . . . . . . 230,000Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . 480,000Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . $ 760,000GOODYEAR CALENDAR COMPANYIncome StatementFor the Year Ending December 31, 2008Sales (on credit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,000,000Less: Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700,000Less: Selling and administrative expenses . . . . . . . . . . . . . . . 400,000*Operating profit (EBIT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000Less: Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000Earnings before taxes (EBT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280,000Less: Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,000Earnings after taxes (EAT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 168,000*Includes $10,000 in lease payments.
