ABC Co. Balance Sheet As of December 31, 2017 ASSETS 2017 Cash and cash equivalents 30,000 Accounts receivable - net 1,672,000 Inventory 500,000 Prepaid assets 48,000 Total Current Assets 2,250,000 Property, Plant & Equipment 780,000 Total Noncurrent Assets 780,000 TOTAL ASSETS 3,030,000 LIABILITIES Accounts payable-net 980,000 Notes payable (current portion) 180,000 Total Current Liabilities 1,160,000 Notes payable ( noncurrent portion) 180,000 Total Noncurrent Liabilities 180,000 TOTAL LIABILITIES 1.340,000 EQUITY Owner's capital 1,690,000 TOTAL LIABILITIES & EQUITY 3,030,000 ABC Co. Income Statement For the year ended December 31, 2017 Sales ( Credit sales amount to 3,200,000 4,000,000 Cost of sales (1,400,000) GROSS PROFIT 2,600,000 Salaries exense (780,000 Utilities expense (120,000 Rent expense (156,000 Depreciation expense (240,000) Bad debts expense (72,000 Interest expense (36,000) PROFIT FOR THE YEAR 1,196,000Requirements. Compute for the following Financial ratios in 2017 a. Current ratio b. Quick ratio ( Acid - test ratio) c. Working capital . Inventory turnover e. Days of inventory ( Average sale period ) F. Accounts receivable turnover g. Days of receivable ( Average collection period ) h. Debt ratio (Debt-to-asset ratio) i. Equity ratio (Debt-to-asset ratio) J. Debt-to-equity ratio k. Gross profit ratio L. Net profit ratio m. Return on assets n. Return on equity ( Return on net assets) Formula. Current Assets a. Current Ratio = Current Liabilities b. Quick Ratio ( Acid-test ratio ) = (Quick Assets) Cash +Marketable Securities + Accounts Receivable, net Current Liabilities c. Working Capital = Current assets - Current Liabilities Cost of goods sold d. Inventory Turnover = Average Inventory Inventory, beg + Inventory, end Average Inventory = 2 365 days in a year e. Days of Inventory = Inventory turnover Credit Sales F. Accounts Receivable Turnover = Average Accounts Receivable Average Accounts Receivable = Accounts receivable, beg + Accounts Receivable, end 365 days in a year g. Days of Receivable ( Average Collection Period ) = Receivable turnover Total Liabilities h. Debt Ratio ( Debt-to-asset ratio ) = Total Assets Total Equity i. Equity Ratio = Total Assets Total Liabilities J. Debt-to-Equity Ratio = Total Equity Gross Profit K. Gross Profit Ratio = Net Sales Profit for the Year L. Net Profit Ratio = Net Sales