O ezto.mheducationcom/hm.tpx xercise 12-7 Calculate risk ratios (LO12-3) The bal
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O ezto.mheducationcom/hm.tpx xercise 12-7 Calculate risk ratios (LO12-3) The balance sheets for Plasma Screens Corporation and additional information are provid Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Current assets: Cash Accounts receivable Inventory Investments S 116,800 120,000 92,000 80,000 .2,000 78,000 95,000 4,000 Long-term assets Land Equipment Less: Accumulated depreciation 480,000 790,000 (428,000) 480,000 670,000 (268,000) Total assets $ 1,135,800 S 1,176,000 Liabilities and Stockholders Equity Current liabilities Accounts payable Interest payable Income tax payable S 99,000 S 85,000 12,000 5,000 6,000 8,000 100,000 700,000 Long-term liabilities Notes payable 200,000 Stockholders' equity Common stock Retained earnings 700,000 174,000 222800 Total liabilities and stockholders equity S 1,135.800 $ 1.176,000 ype here to searchExplanation / Answer
1 Accounts Receivable Turn Over 17.90 times Inventory turnover 13.30 times Current ratio 2.60 to 1 Acid Test ratio 1.76 to 1 Debt to equity ratio 24.58 % Accounts Receivable Turn Over Annual credit sales (net) / Average accounts receivables 1,521,500 / (78000+92000)/2 1,521,500 / 85000 17.9 times Inventory turnover Cost of goods sold / Average inventory at cost 1,163,750 / (95000+80000)/2 =1,163,750/87500 13.3 times Current ratio Current assets/current liability (116800+78000+95000+4000)/(99000+6000+8000) 293800/113000 2.6 to 1 Acid test ratio Total Current assets - inventory / Current liability (293800-95000) / 113000 1.76 to 1 Debt to equity ratio Total Liability / total equity 213000/923800 23.06 % 2 yes
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