Weber’s Pet Supply Company
Chapter 15 Accounting in Action
July 2, 2018Local Landscaping uses a job-order costing system
July 2, 2018Given the balance sheet and income state for Weber’s Pet Supply Company (see Doc Sharing), compute the ratios that are shown in the table, which also shows the industry average. In the column on the right indicate whether a particular ratio for Weber’s is better or worse than the industry average.Weber’s Pet Supply CompanyBalance SheetAssetsCashAcct ReceivableInvertoryCurrent AssetsNet Fixed Assets$15,00022,00030,00067,00073,000Total AssetsLiabilitiesAcct PayableNotes PayableAccrued ExpensesCurrent LiabilitesLong-term DebtStockholders’ Equity$140,000Total Liabilities andStockholders’ EquityIncome StatementSales (80% credit)Less: Cost of Goods SoldGross ProfitSelling & Admin ExpenseRent (lease) ExpenseEarnsing Before Interest & TaxesInterest ExpenseEarning before TaxesTaxes @25%Common shares outstandingEPS$140,000Ratio$120,00045,00075,00020,0008,000$21,00020,0005,00046,00030,00064,00028,00047,0005,00042,00010,500$31,50015,000$2.10Profit marginReturn on assetsReturn on equityReceivavles turnoverAvg. collection periodInventory turnoverFixed assets turnoverTotal assets turnoverCurrent ratioQuick ratioDebt to total assetsTimes interest earnedFixed charge coverageRatio forWeber’sIndustryAverage17.50%20.80%35.00%4.4×68.0 days3.5×2.4x.76×1.280.850.4512.0x3.6xBetter (B) orWorse (W)