The 2012 income statement of Adran million, and net income of $2.6 milion. Balan

Question

The 2012 income statement of Adran million, and net income of $2.6 milion. Balance sheet information is amounts are in thousands Express reports sales of $152 million, cost of goods sold of $10.2 sheet information is provided in the following table. All ADRIAN EXPRESS Balance Sheet mber 31, 2012 and 2011 (S in 000s) Assets 2012 2011 Current assets Cash $520 $ 760 980 1,8901,360 4,8204.330 1,470 Inventory Long-term assets Total assets s 8,700 $7430 Liabilities and Stockholders Equity s 2,030 $ 1,580 2,3082.398 2,010 2,010 1,442 Current liabilities liabilities stock Retained earnings 2,3521 $8,700 $7.430 Industry averages for the following four risk ratios are as follows Average collection period Average days in inventory Current ratio Debt to equity ratio 25 days 60 days 2 to 1

Explanation / Answer

2012

Average collection period

(1470000*365)/15200000

Average days in inventory

(1890000*365)/10200000

Current ratio

(520000+1470000+1890000)/2030000

Debt to equity ratio

2308/(2010+2352)

2012 Industry Average collection period 35 days 25days more risky Average days in inventory 67 days 60 days more risky Current ratio         1.91 2 to 1 more risky Debt to equity ratio 53% 50% more risky

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