1 2 3456789 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 55 56 Name: Net sales Cost of goods sold Gross margin Operating expenses Net income Cash Accounts receivable, net Merchandise inventory The Netflix Company began operations in 2024. Its comparative income statements and balance sheets follow. Use a formula to calculate the ratios below. The AVERAGE formula must be used in any ratios using average accounts receivable, average inventory or average total assets. Plant assets, net Total assets Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and equity Liquidity and Efficiency Current ratio Acid-test ratio Accounts receivable turnover Inventory turnover Total asset turnover Solvency Debt ratio Equity ratio Sum of Debt and Equity ratios Debt-to-equity ratio Profitability Profit margin ratio Gross margin ratio Return on total assets Netflix Instructions Netflix Company Comparative Income Statements For Years Ended December 31, 2027-2024 2027 $261,000 133,000 128,000 68,000 $60,000 $40,000 190,000 60,000 142,000 $432,000 2027 2027 2026 $233,000 172,000 Netflix Company Comparative Balance Sheets For Years Ended December 31, 2027-2024 2027 2026 $119,000 $152,000 73,000 65,000 60,000 27,000 180,000 170,000 $432,000 $414,000 2027 61,000 32,000 $29,000 $52,000 220,000 60,000 82,000 $414,000 2026 2026 2026 2025 $203,000 125,000 78,000 Ratios Summary of Ratios 41,000 $37,000 2025 $88,000 57,000 56,000 150,000 $351,000 $38,000 200,000 60,000 53,000 $351,000 2025 2025 Your score: 2025 2024 $144,000 111,000 33,000 17,000 $16,000 2024 $142,000 40,000 17,000 150,000 $349,000 0% $33,000 240,000 60,000 16,000 $349,000

2 Name: Netflix Your score: 0% The Netflix Company began operations in 2024. Its comparative income statements and balance sheets follow. Use a formula to calculate the ratios below. The AVERAGE formula must be used in any ratios using average accounts receivable, average inventory or average total assets. 10 Net sales Netflix Company Comparative Income Statements For Years Ended December 31, 2027-2024 2027 $261,000 2026 $233,000 2025 $203,000 2024 $144,000 11 Cost of goods sold 133.000 172,000 125,000 111,000 12 Gross margin 128,000 61,000 78,000 33,000 13 Operating expenses 68.000 32,000 41,000 17.000 14 Net income $60,000 $29,000 $37,000 $16,000 15 16 Netflix Company. Comparative Balance Sheets For Years Ended December 31, 2027-2024 19 20 2027 2026 2025 2024 21 Cash $119,000 $152,000 $88,000 $142,000 22 Accounts receivable, net 73,000 65,000 57,000 40,000 23 Merchandise inventory 60,000 27,000 56,000 17,000 24 Plant assets, net 180,000 170,000 150,000 150,000 25 Total assets $432,000 $414,000 $351,000 $349,000 26 27 Current liabilities $40,000 $52,000 $38,000 $33,000 28 Long-term liabilities 190,000 220,000 200,000 240,000 29 Common stock 60,000 60,000 60,000 60,000 30 Retained earnings 142,000 82,000 53.000 16,000 31 Total liabilities and equity $432,000 $414,000 $351,000 $349,000 36 37 Liquidity and Efficiency 2027 2026 2025 39 Current ratio 40 Acid-test ratio 41 Accounts receivable turnover 42 Inventory turnover 43 Total asset turnover 44 Solvency 2027 2026 2025 45 Debt ratio 46 Equity ratio 47 Sum of Debt and Equity ratios 48 Debt-to-equity ratio 49 Profitability 2027 2026 2025 50 Profit margin ratio 51 Gross margin ratio 52 Return on total assets 56 Instructions Ratios Summary of Ratios