Exercise 12-5B Evaluate risk ratios (LO12-3) The 2018 income statement of Adrian Express reports sales of $15.2 million, cost of goods sold of $10 million, and net income of $3.2 million. Balance sheet information is provided in the following table ADRIAN EXPRESS Balance Sheet December 31, 2018 and 2017 2018 2017 Assets Current assets: Cash Accounts receivable Inventory S 800,000 900,000 2,100,000 ,800,000 1,600,000 5,200,000 5,400,000 1,500,000 Long-term assets Total assets $9,600,000 $9,700,000 Liabilities and Stockholders' Equity Current liabilities $1,800,000 $2,000,000 1,500,000 ,0,000 3,000,000 3,300,000 2,600,000 Long-term liabilities Common stock 3,000,000 Retained earnings Total liabilities and stockholders' equity $9,600,000 $9,700,000 3,000,000 3,000,000 3,300,000 2,600,000 Common stock Retained earnings $9,600,000 $9,700,000 Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: 50 days 60 days 2 to 1 60% Average collection period Average days in inventory Current ratio Debt to equity ratio Required: 1. Calculate the four risk ratios listed above for Adrian Express in 2018. (Use 365 days in a year. Round your answers to 1 decimal place.) Risk Ratios Average collection period Average days in inventory Current ratio Debt to equity ratio days days to 1 1. 1. Calculate the four risk ratios listed above for Adrian Express in 2018. (Use 365 days in a year. Round your answers to 1 decimal place.) Risk Ratios Average collection period Average days in inventory Current ratio Debt to equity ratio days days to 1 2. Do you think the company is more risky or less risky than the industry average? O More risky Less risky Hints References eBook & Resources Hint#1