Question

21) Given the financial statements for Jones Corporation and Smith Corporation:  
 JONES CORPORATIONCurrent AssetsLiabilities  Cash  $126,600    Accounts payable$156,000    Accounts receivable   188,500    Bonds payable (long term) 81,100    Inventory   59,200     Long-Term Assets  Stockholders’ Equity  Gross fixed assets$525,000      Common stock$150,000       Less: Accumulated depreciation 154,100      Paid-in capital 70,000             Net fixed assets*   370,900    Retained earnings 288,100             Total assets  $745,200         Total liabilities and equity$745,200              Sales (on credit)$1,758,000    Cost of goods sold 727,000     Gross profit$1,031,000    Selling and administrative expense^† 321,000    Depreciation expense 55,300     Operating profit$654,700    Interest expense 12,400     Earnings before taxes$642,300    Tax expense 96,700     Net income$545,600   *Use net fixed assets in computing fixed asset turnover.^†Includes $8,000 in lease payments.   SMITH CORPORATIONCurrent AssetsLiabilities  Cash  $43,100    Accounts payable$76,100    Marketable securities   14,700    Bonds payable (long term) 303,000    Accounts receivable   75,300       Inventory   84,200     Long-Term AssetsStockholders’ Equity  Gross fixed assets$587,000      Common stock$75,000       Less: Accumulated depreciation 252,800      Paid-in capital 30,000        Net fixed assets*   334,200    Retained earnings 67,400             Total assets  $551,500         Total liabilities and equity$551,500      *Use net fixed assets in computing fixed asset turnover.   SMITH CORPORATION  Sales (on credit)$1,540,000    Cost of goods sold 1,129,000     Gross profit$411,000    Selling and administrative expense^† 233,000    Depreciation expense 52,000     Operating profit$126,000    Interest expense 25,400     Earnings before taxes$100,600    Tax expense 60,400     Net income$40,200   ^†Includes $8,000 in lease payments.   a.Compute the following ratios. (Use a 360-day year. Do not round intermediate calculations. Input your profit margin, return on assets, return on equity, and debt to total assets answers as a percent rounded to 2 decimal places. Round all other answers to 2 decimal places.)  
  Jones Corp.Smith Corp.  Profit margin % %  Return on assets (investments) % %  Return on equity % %  Receivable turnover times times  Average collection period days days  Inventory turnover times times  Fixed asset turnover times times  Total asset turnover times times  Current ratio times times  Quick ratio times times  Debt to total assets % %  Times interest earned times times  Fixed charge coverage times times

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