Question 2. (4 Marks)

Case 1 Selected account balances of the George D. Kambouris GDK L.L.C. balance sheet (statement of financial position) and income statements at December 31, 2020 were as follows:

Current assets 980,000, long term liabilities 80,000, accounts receivable 2019 $ 500,000 and 2020 $700,000, retained earnings, 650,000, sales 1,600,000, inventory 2019 $ 400,000, and 2020 220,000, total liabilities 700,000, total assets 2020 $2,200,000, 2019 $ 1,800,000, cost of goods sold 1,200,000, net income 280,000, current liabilities 620,000, equity: common stock 900,000, total stockholders equity 1,550,000, Shares outstanding 1,200,000.

Required:

Complete the table below and perform the following:

1. (1 Mark) Compute the following ratios for 2020.

2. (1.5 Marks) Comment if each ratio is (F) favorable or (UN) unfavorable.

3. (1.5 Marks) Compare the company ratios to the industry ratios and write company if the company ratio is better or industry if the industry ratio is better.

	Ratio	F UN	Industry	Company / Industry
Current ratio =			1.7
Receivables turnover =			3.5
Inventory turnover =			3
Earnings per share =			19
Debt to equity =			47%
Days sales outstanding =			104
Debt to total assets =			34%
Days inventory on hand =			91
Quick Ratio =			.94