Exercise 16-8 (Algo) Selected Financial Ratios [LO16-2, LO16-3, LO16-4] The financial statements for Castile Products, Incorporated, are given below: Castile Products, Incorporated Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses Total current assets Property and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 11% Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Sales Castile Products, Incorporated Income Statement For the Year Ended December 31 Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes (30%) Net income $ 22,000 220,000 340,000 10,000 592,000 820,000 $ 1,412,000 $270,000 360,000 630,000 $ 100,000 682,000 782,000 $ 1,412,000 $ 3,870,000 1,575,000 2,295,000 650,000 1,645,000 39,600 1,605,400 481,620 $ 1,123,780 Account balances at the beginning of the year were: accounts receivable, $210,000; and inventory, $360,000. All sales were on account. Account balances at the beginning of the year were: accounts receivable, $210,000; and inventory, $360,000. All sales were on account. Required: Compute the following financial data and ratios: 1. Working capital. 2. Current ratio. (Round your answer to 1 decimal place.) 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 intermediate calculations and final answer to 1 decimal place.) 7. Average sale period. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.) 8. Operating cycle. (Use 365 days in a year. Round your intermediate calculations and final answer to 1 decimal place.) 1. Working capital 2. Current ratio 3. Acid-test ratio 4. Debt-to-equity ratio 5. Times interest earned ratio 6. Average collection period 7. Average sale period 8. Operating cycle days days days