Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Can you help solve the following problem? The 2021 income statement of Adrian Express reports sales of $15,642,000, cost of goods sold of $9,351,500, and
Can you help solve the following problem?
The 2021 income statement of Adrian Express reports sales of $15,642,000, cost of goods sold of $9,351,500, and net income of $1,590,000. Balance sheet information is provided in the following table.
ADRIAN EXPRESS Balance Sheets December 31, 2021 and 2020 | ||||||||
2021 | 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 590,000 | $ | 750,000 | ||||
Accounts receivable | 1,380,000 | 990,000 | ||||||
Inventory | 1,780,000 | 1,390,000 | ||||||
Long-term assets | 4,790,000 | 4,230,000 | ||||||
Total assets | $ | 8,540,000 | $ | 7,360,000 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities | $ | 2,010,000 | $ | 1,650,000 | ||||
Long-term liabilities | 2,290,000 | 2,390,000 | ||||||
Common stock | 1,980,000 | 1,980,000 | ||||||
Retained earnings | 2,260,000 | 1,340,000 | ||||||
Total liabilities and stockholders' equity | $ | 8,540,000 | $ | 7,360,000 | ||||
Industry averages for the following four risk ratios are as follows:
Average collection period | 25 days | |
Average days in inventory | 60 days | |
Current ratio | 2 to 1 | |
Debt to equity ratio | 50% | |
Required: 1. Calculate the four risk ratios listed above for Adrian Express in 2021. (Use 365 days in a year. Round your answers to 1 decimal place.)
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started