Financial Ratios

The financial statements for Jackson Enterprises (income statement, statement of owners equity, and balance sheet) are shown.

Jackson Enterprises Income Statement For Year Ended December 31, 20-- Revenue from sales: Sales $184,200 Less: Sales returns and allowances 2,100 Net sales $182,100 Cost of goods sold: Merchandise inventory, January 1, 20-- $30,000 Estimated returns inventory, January 1, 20-- 1,300 $31,300 Purchases $92,800 Less: Purchases returns and allowances $1,800 Purchases discounts 1,856 3,656 Net purchases $89,144 Add: Freight-in 933 Cost of goods purchased 90,077 Goods available for sale $121,377 Less: Merchandise inventory, Dec. 31, 20-- $27,000 Estimated returns inventory, Dec. 31, 20-- 1,177 28,177 Cost of goods sold 93,200 Gross profit $88,900 Operating expenses: Wages expense $38,000 Advertising expense 1,180 Supplies expense 380 Phone expense 2,210 Utilities expense 11,000 Insurance expense 900 Depreciation expensebuilding 4,000 Depreciation expenseequipment 3,800 Miscellaneous expense 530 Total operating expenses 62,000 Income from operations $26,900 Other revenues: Interest revenue $1,800 Other expenses: Interest expense 900 900 Net income $27,800

Jackson Enterprises Statement of Owner's Equity For Year Ended December 31, 20-- J. B. Gray, capital, January 1, 20-- $88,000 Net income for the year $27,800 Less: Withdrawals for the year 11,600 Increase in capital 16,200 J. B. Gray, capital, December 31, 20-- $104,200

Jackson Enterprises Balance Sheet December 31, 20-- Assets Current assets: Cash $20,800 Accounts receivable 18,900 Merchandise inventory 27,000 Estimated returns inventory 1,177 28,177 Supplies 1,323 Prepaid insurance 900 Total current assets $70,100 Property, plant, and equipment: Building $90,000 Less: Accumulated depreciation-building 28,000 $62,000 Equipment $33,000 Less: Accumulated depreciation-equipment 7,500 25,500 Total property, plant, and equipment 87,500 Total assets $157,600 Liabilities Current liabilities: Accounts payable $11,100 Customer refunds payable 1,500 Wages payable 500 Sales tax payable 1,200 Mortgage payable 800 Total current liabilities $15,100 Long-term liabilities: Mortgage payable $39,100 Less: Current portion 800 38,300 Total liabilities $53,400 Owner's Equity J. B. Gray, capital 104,200 Total liabilities and owner's equity $157,600

Compute the following financial ratios. All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was $21,600.

Round answers to one decimal place.

blank Jackson Enterprises December 31, 20-- Working capital: $fill in the blank 1 55,000 Current ratio: fill in the blank 2 4.6 to 1 Quick ratio: fill in the blank 3 to 1 Return on owner's equity: fill in the blank 4 28.9 % Accounts receivable turnover: fill in the blank 5 Average number of days required to collect receivables fill in the blank 6 40.6 Inventory turnover: fill in the blank 7 3.1 Average number of days required to sell inventory fill in the blank 8