Question
Redlands, Inc. presents the following Income Statement and Balance Sheet for 2014. Income Statement Sales revenues $200 Cost of goods sold 120 Gross profit 80
Redlands, Inc. presents the following Income Statement and Balance Sheet for 2014.
Income Statement
Sales revenues | $200 |
Cost of goods sold | 120 |
Gross profit | 80 |
Operating expenses | 50 |
Net income | $ 30 |
Balance Sheet
Assets |
|
| Liabilities |
|
Cash | $ 60 |
| Accounts payable | $ 70 |
Accounts receivable | 90 |
|
|
|
Inventory | 140 |
| Shareholders Equity |
|
Current assets | 290 |
| Common stock | 240 |
|
|
| Retained earnings | 190 |
Equipment | 210 |
| Total S/Equity | 430 |
Total assets | $500 |
| Total Liabilities and S/E | $500 |
Required: Use the income statement and balance sheet data (in dollars) above to compute the following ratios:
Return on equity
Working capital (current) ratio
Inventory turnover
Accounts receivable turnover
Total debt to total capital ratio
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