Financial Ratios

Financial statements for Paulson's Pet Store are shown.

Paulson's Pet Store

Income Statement

For Year Ended December $31,20--$

Revenue from sales:

Sales $$326,050$

Less: Sales returns and allowances $5,360$

Net sales $$320,690$

Cost of goods sold:

Merchandise inventory, January $1,20--$ $$29,200$

Estimated returns inventory, January $1,20--900$ $$30,100$

Purchases $$162,630$

Less: Purchases returns and allowances $$4,080$

Less: Purchases discounts $3,2007,280$

Net purchases $$155,350$

Add freight$-$in $1,600$

Cost of goods purchased $156,950$

Goods available for sale $$187,050$

Less: Merchandise inventory, December $31,20--$ $$24,900$

Less: Estimated returns inventory, December $31,20--1,10026,000$

Cost of goods sold $161,050$

Gross profit $$159,640$

Operating expenses:

Wages expense $$69,300$

Advertising expense $1,200$

Supplies expense $800$

Phone expense $2,736$

Utilities expense $2,864$

Insurance expense $1,600$

Depreciation expense$-$building $10,000$

Depreciation expense$-$store equipment $1,800$

Miscellaneous expense $600$

Total operating expenses $90,900$

Income from operations $$68,740$

Other expenses:

Interest expense $640$

Net income $$68,100$

Paulson's Pet Store

Statement of Owner$$s Equity

For Year Ended December $31,20--$

B$.$ Paulson, capital, January $1,20--$ $$474,290$

Add additional investments $30,000$

Total investment $$504,290$

Net income for the year $$68,100$

Less: Withdrawals for the year $4,700$

Increase in capital $63,400$

B$.$ Paulson, capital, December $31,20--$ $$567,690$

Paulson's Pet Store

Balance Sheet

December $31,20--$

Assets

Current assets:

Cash $$23,450$

Accounts receivable $59,350$

Merchandise inventory $24,900$

Estimated returns inventory $1,100$

Supplies $2,500$

Prepaid insurance $1,800$

Total current assets $$113,100$

Property, plant, and equipment:

Land $$90,000$

Building $$350,000$

Less: Accumulated depreciation $20,000330,000$

Store Equipment $$120,000$

Less: Accumulated depreciation $3,600116,400536,400$

Total assets $$649,500$

Liabilities

Current liabilities:

Note payable $$2,000$

Accounts payable $59,570$

Customer refunds payable $1,500$

Wages payable $1,300$

Sales tax payable $3,440$

Total current liabilities $$67,810$

Long$-$term liabilities:

Note payable $$16,000$

Less: Current portion $2,00014,000$

Total liabilities $$81,810$

Owner's Equity

B$.$ Paulson, capital $567,690$

Total liabilities and owner's equity $$649,500$

All sales are credit sales. The Accounts Receivable balance on January $1,20--,$ was $$10,300.$

Required:

Compute the financial ratios. Round answers to one decimal place.

blank

Financial Ratios

Current ratio fill in the blank $1$

$1\mathrm{.}7$

to $1$

Quick ratio fill in the blank $2$

$1\mathrm{.}2$

to $1$

Working capital $fill in the blank $3$

$45,290$

Return on owner's equity fill in the blank $4$

$13\mathrm{.}1$

$\%$

Accounts receivable turnover fill in the blank $5$

Average number of days to collect receivables fill in the blank $6$

days

Inventory turnover fill in the blank $7$

Average number of days to sell inventory fill in the blank $8$

days