The following information for 2016 was gathered from the financial statements of Epicentre Corporation.
Additional information from the December 31, 2015 balance sheet:
|
Accounts receivable |
$180 |
|
Merchandize inventory |
200 |
|
Capital assets, at carrying amount |
250 |
|
Retained earnings |
80 |
|
Preferred shares |
120 |
|
Common shares |
250 |
Required:
- Compute the following ratios for 2016:
- Current ratio
- Acid-test ratio
- Accounts receivable collection period
- Number of days of sales in inventory
- Debt to shareholders’ equity ratio
- Return on shareholders’ equity
- Earnings per share (assume all preferred share dividends are paid)
- Compute dividends paid on common shares for 2016.
- What do these ratios tell you about Epicentre Corporation?
- (Appendix) Restate the financial statements to facilitate Scott formula analysis.
- (Appendix) Calculate the Scott formula and analyze the results.
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