5. Income Statement and Balance Sheets Deep Falls Timber 2015 Income Statement Net sales Cost of...

b)
Day’s sales in inventory = (Ending inventory/Cost of goods sold) x 365

= ($70,500 / $409,800) * 365

= 0.172035139 * 365

= 62.79 days

c)
Equity multiplier = Total assets / Total equity

= $658,000 / ($220,000 + $224,400)

= $658,000 / $444,400

= 1.48

d)
Profit Margin = Net Income / Total Sales
= $50,800 / $642,100
= 0.0791 or 7.91%

Total Asset Turnover = Total Sales / Total Assets
= $642,100 / $658,000
= 0.98

Equity Multiplier = Total Assets / Total Equity
= $658,000 / ($220,000 + $224,400)
= $658,000 / $444,400
= 1.48

Return on Equity = Profit Margin * Total Asset Turnover * Equity Multiplier
= 7.91% * 0.98 * 1.48
= 11.47%

e)
Price-earnings ratio = Price per share / Earnings per share
= $6.50 / ($50,800 / 220,000)
= $6.50 / 0.230909091
= 28.15

f)
Market to book ratio = Market price per share/Book value per share
= $6.50 / (($220,000 + $224,400) / 220,000)
= $6.50 / ($444,400 / 220,000)
= $6.50 / $2.02
= 3.22