{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-09-13T00:05:19-04:00", "answer_date": "2024-09-13 00:05:19", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "10521742", "url": "\/study-help\/questions\/exercise-138-selected-financial-ratios-lo132-lo133-lo134-the-financial-10521742", "question_creation_date_js": "2024-09-13T00:05:19-04:00", "question_creation_date": "Sep 13, 2024 12:05 AM", "meta_title": "[Solved] Exercise 13-8 Selected Financial Ratios [ | SolutionInn", "meta_description": "Answer of - Exercise 13-8 Selected Financial Ratios [LO13-2, LO13-3, LO13-4] The financial statements for Castile Products, Inc., | SolutionInn", "meta_keywords": "exercise,13-8,selected,financial,ratios,lo13-2,lo13-3,lo13-4,statements,castile,products,inc.", "question_title_h1": "Exercise 13-8 Selected Financial Ratios [LO13-2, LO13-3, LO13-4] The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31", "question_title": "Exercise 13-8 Selected Financial Ratios [LO13-2, LO13-3, LO13-4] The financial statements for", "question_title_for_js_snippet": "Exercise 13 8 Selected Financial Ratios LO13 2, LO13 3, LO13 4 The financial statements for Castile Products, Inc , are given below Castile Products, Inc Balance Sheet December 31 Assets Current assets Cash $ 21,000 Accounts receivable, net 200,000 Merchandise inventory 380,000 Prepaid expenses 11,000 Total current assets 612,000 Property and equipment, net 810,000 Total assets $ 1,422,000 Liabilities and Stockholders' Equity Liabilities Current liabilities $ 290,000 Bonds payable, 12 390,000 Total liabilities 680,000 Stockholders equity Common stock, $10 par value $ 190,000 Retained earnings 552,000 Total stockholders equity 742,000 Total liabilities and equity $ 1,422,000 Castile Products, Inc Income Statement For the Year Ended December 31 Sales $ 2,380,000 Cost of goods sold 1,485,000 Gross margin 895,000 Selling and administrative expenses 630,000 Net operating income 265,000 Interest expense 46,800 Net income before taxes 218,200 Income taxes (30 ) 65,460 Net income $ 152,740 Account balances at the beginning of the year were accounts receivable, $140,000 and inventory, $280,000 All sales were on account Required Compute the following financial data and ratios 1 Working capital 2 Current ratio (Round your answer to 2 decimal places ) 3 Acid test ratio (Round your answer to 2 decimal places ) 4 Debt to equity ratio (Round your answer to 2 decimal places ) 5 Times interest earned ratio (Round your answer to 2 decimal places ) 6 Average collection period (Use 365 days in a year Round your answer to 1 decimal place ) 7 Average sale period (Use 365 days in a year Round your intermediate and final answer to 1 decimal place ) 8 Operating cycle (Round your intermediate calculations and final answers to 1 decimal place )", "question_description": "

Exercise 13-8 Selected Financial Ratios [LO13-2, LO13-3, LO13-4]<\/p>

The financial statements for Castile Products, Inc., are given below:<\/p> <\/td> <\/tr> <\/tbody> <\/table>

<\/p>
Castile Products, Inc. Balance Sheet December 31<\/td> <\/tr>
Assets<\/strong> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Current assets:<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Cash<\/td> <\/td> <\/td> <\/td> $<\/td> 21,000<\/td> <\/td> <\/tr>
Accounts receivable, net<\/td> <\/td> <\/td> <\/td> <\/td> 200,000<\/td> <\/td> <\/tr>
Merchandise inventory<\/td> <\/td> <\/td> <\/td> <\/td> 380,000<\/td> <\/td> <\/tr>
Prepaid expenses<\/td> <\/td> <\/td> <\/td> <\/td> 11,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Total current assets<\/td> <\/td> <\/td> <\/td> <\/td> 612,000<\/td> <\/td> <\/tr>
Property and equipment, net<\/td> <\/td> <\/td> <\/td> <\/td> 810,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Total assets<\/td> <\/td> <\/td> <\/td> $<\/td> 1,422,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Liabilities and Stockholders' Equity<\/strong><\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Liabilities:<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Current liabilities<\/td> <\/td> <\/td> <\/td> $<\/td> 290,000<\/td> <\/td> <\/tr>
Bonds payable, 12%<\/td> <\/td> <\/td> <\/td> <\/td> 390,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Total liabilities<\/td> <\/td> <\/td> <\/td> <\/td> 680,000<\/td> <\/td> <\/tr>
Stockholders equity:<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Common stock, $10 par value<\/td> <\/td> <\/td> <\/td> $<\/td> 190,000<\/td> <\/td> <\/tr>
Retained earnings<\/td> <\/td> <\/td> <\/td> <\/td> 552,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Total stockholders equity<\/td> <\/td> <\/td> <\/td> <\/td> 742,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
Total liabilities and equity<\/td> <\/td> <\/td> <\/td> $<\/td> 1,422,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/td> <\/tr>
<\/td> <\/tr> <\/tbody> <\/table>

<\/p>
Castile Products, Inc. Income Statement For the Year Ended December 31<\/td> <\/tr>
Sales<\/td> $<\/td> 2,380,000<\/td> <\/td> <\/tr>
Cost of goods sold<\/td> <\/td> 1,485,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
Gross margin<\/td> <\/td> 895,000<\/td> <\/td> <\/tr>
Selling and administrative expenses<\/td> <\/td> 630,000<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
Net operating income<\/td> <\/td> 265,000<\/td> <\/td> <\/tr>
Interest expense<\/td> <\/td> 46,800<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
Net income before taxes<\/td> <\/td> 218,200<\/td> <\/td> <\/tr>
Income taxes (30%)<\/td> <\/td> 65,460<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
Net income<\/td> $<\/td> 152,740<\/td> <\/td> <\/tr>
<\/td> <\/td> <\/td> <\/td> <\/tr>
<\/td> <\/tr> <\/tbody> <\/table>

<\/p>

Account balances at the beginning of the year were: accounts receivable, $140,000; and inventory, $280,000. All sales were on account.<\/p> <\/td> <\/tr> <\/tbody> <\/table>

<\/p>
Required:<\/strong><\/td> <\/tr>
Compute the following financial data and ratios:<\/td> <\/tr> <\/tbody> <\/table>

<\/p>
1.<\/td>

Working capital.<\/p> <\/td> <\/tr> <\/tbody> <\/table>

<\/p>

<\/p>

<\/p>
2.<\/td> Current ratio. (Round your answer to 2 decimal places.)<\/strong> <\/td> <\/tr> <\/tbody> <\/table>

<\/p>

<\/p>
3.<\/td> Acid-test ratio. (Round your answer to 2 decimal places.)<\/strong> <\/td> <\/tr> <\/tbody> <\/table>

<\/p>

<\/p>
4.<\/td> Debt-to-equity ratio. (Round your answer to 2 decimal places.)<\/strong> <\/td> <\/tr> <\/tbody> <\/table>

<\/p>

<\/p>
5.<\/td> Times interest earned ratio. (Round your answer to 2 decimal places.)<\/strong> <\/td> <\/tr> <\/tbody> <\/table>

<\/p>

<\/p>
6.<\/td> Average collection period. (Use 365 days in a year. Round your answer to 1 decimal place.)<\/strong> <\/td> <\/tr> <\/tbody> <\/table>

<\/p>

<\/p>
7.<\/td> Average sale period. (Use 365 days in a year. Round your intermediate and final answer to 1 decimal place.)<\/strong> <\/td> <\/tr> <\/tbody> <\/table>

<\/p>

<\/p>
8.<\/td>

Operating cycle. (Round your intermediate calculations and final answers to 1 decimal place.)<\/strong><\/p> <\/td> <\/tr> <\/tbody> <\/table>

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