The Financial Statements of the Poston Company Appear Below

Essay

The financial statements of the Poston Company appear below.Calculate the following ratios:
a. Rate of return on assets
b. Rate of retum on common shareholders' equity
c. Eamings per share of common stock
d. Current ratio (both dates)
e. Cash flow from operations to current liabilities
f. Long-term debt ratio (both dates)
g. Cash flow from operations to total liabilities
h. Interest coverage

$\begin{array}{lll}&\text { January } 1&\text { December } 31\\\text { Current assets } & \$ 180,000 & \$ 210,000 \\\text { Noncurrent assets } & 255,000 & 275,000 \\\text { Current liabilities } & 85,000 & 78,000 \\\text { Long-term liabilities } & 30,000 & 75,000 \\\text { Common stock, } 10,000 \text { shares } & 300,000 & 300,000 \\\text { Retained earmings } & 20,000 & 32,000\\\\\\\text { Operations }\\\\\text { Net income } & \$ 84,000 \\\text { Interest expense } & 3,000 \\\text { Income taxes (30 percent rate) } & 36,000 \\\text { Cash provided by operations } & 30,970 \\\text { Dividends declared } & 72,000\end{array}$