Question
Income statement and balance sheet data for Great Adventures, Inc., are provided below. GREAT ADVENTURES, INC. Income Statement For the year ended December 31, 2022
Income statement and balance sheet data for Great Adventures, Inc., are provided below.
GREAT ADVENTURES, INC. | ||||||
Income Statement | ||||||
For the year ended December 31, 2022 | ||||||
Net sales revenues | $ | 197,590 | ||||
Interest revenue | 440 | |||||
Expenses: | ||||||
Cost of goods sold | $ | 40,100 | ||||
Operating expenses | 70,920 | |||||
Depreciation expense | 18,850 | |||||
Interest expense | 10,775 | |||||
Income tax expense | 16,100 | |||||
Total expenses | 156,745 | |||||
Net income | $ | 41,285 | ||||
GREAT ADVENTURES, INC. | ||||||||
Balance Sheets | ||||||||
December 31, 2022 and 2021 | ||||||||
2022 | 2021 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 317,302 | $ | 64,820 | ||||
Accounts receivable | 50,480 | 0 | ||||||
Inventory | 10,200 | 0 | ||||||
Other current assets | 1,220 | 5,780 | ||||||
Long-term assets: | ||||||||
Land | 820,000 | 0 | ||||||
Buildings | 880,000 | 0 | ||||||
Equipment | 94,960 | 56,000 | ||||||
Accumulated depreciation | (28,450 | ) | (8,800 | ) | ||||
Total assets | $ | 2,145,712 | $ | 117,800 | ||||
Liabilities and Stockholders Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 24,000 | $ | 3,440 | ||||
Interest payable | 1,550 | 910 | ||||||
Income tax payable | 16,100 | 14,320 | ||||||
Other current liabilities | 30,600 | 0 | ||||||
Notes payable (current) | 80,342 | 0 | ||||||
Notes payable (long-term) | 770,825 | 33,200 | ||||||
Stockholders equity: | ||||||||
Common stock | 152,000 | 30,880 | ||||||
Paid-in capital | 1,195,200 | 0 | ||||||
Retained earnings | 61,095 | 35,050 | ||||||
Treasury stock | (186,000 | ) | 0 | |||||
Total liabilities and stockholders equity | $ | 2,145,712 | $ | 117,800 | ||||
As you can tell from the financial statements, 2022 was an especially busy year. Tony and Suzie were able to use the money received from borrowing and the issuance of stock to buy land and begin construction of cabins, dining facilities, ropes course, and the outdoor swimming pool. They even put in a baby pool to celebrate the birth of their first child.
Required:
1. Calculate the following risk ratios for 2022.
2. Calculate the following profitability ratios for 2022. (Use 365 days in a year. Round your intermediate calculations and final answers to 1 decimal place.)
times a. b. days days d. e 1 Receivables turnover ratio. (Hint: Use net sales revenues for net credit sales) Average collection period. Average collection period Inventory turnover ratio. Average days in inventory. Current ratio Acid-test ratio (Hint: There are no current investments) Debt to equity ratio Times interest earned ratio. h. a. Gross profit ratio. (Hint: Use net sales revenues) b. Return on assets. Profit margin. (Hint: Use net sales revenues) Asset turnover (Hint: Use net sales revenues) Return on equity d
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