The Shannon Garrett Company began operations in 2022. Its comparative income statements and balance sheets follow Use a formula to calculate the ratios below. The AVERAGE formula must be used in any ratios using average accounts receivable, average inventory or average total assets. Net sales Cost of goods sold Gross margin Operating expenses Net income Shannon Garrett Company Comparative Income Statements For Years Ended December 31, 2025-2022 2025 2024 2023 $288,000 $258,000 $223,000 138,000 209,000 141,000 150,000 49,000 82,000 71,000 23,000 39,000 $79.000 $26.000 $43,000 2022 $159,000 129,000 30,000 14,000 $16,000 Cash Accounts receivable, net Merchandise inventory Plant assets, net Total assets Shannon Garrett Company Comparative Balance Sheets For Years Ended December 31, 2025-2022 2025 2024 2023 $63,000 $14,000 $27,000 81,000 72.000 62,000 21,000 52,000 22,000 120,000 100,000 80.000 $285,000 $238,000 $191,000 202 $8,000 45,000 32,000 70,000 $155.000 Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and equity $41,000 60,000 20,000 164,000 $285,000 $63,000 70,000 20,000 85,000 $238,000 $42,000 70,000 20,000 59,000 $191,000 $39,000 80,000 20,000 16,000 $155.000 2025 2024 2023 2025 2024 2023 Liquidity and Efficiency Current ratio Acid-test ratio Accounts receivable turnover Inventory turnover Total asset turnover Solvency Debt ratio Equity ratio Sum of Debt and Equity ratios Debt-to-equity ratio Profitability Profit margin ratio Gross margin ratio Return on total assets 2025 2024 2023 E F H K L B D The formula must only contain cell addresses. Each correct formula will begin with =, +, or The basic mathematical operators are +, -, and/ Addition: To add the values in cells A1 and B4, the formula is =A1+84 Subtraction: To subtract the value in cell B4 from the value in cell A1, the formula is =A1-B4 Multiplication: To multiply the values in cells A1 and B4, the formula is -A1*84 Division: To divide the value in cell A1 by the value in cell B4, the formula is =A1/B4 1 2 Using the AVERAGE function The AVERAGE function has the following syntax: +AVERAGE(Number 1, Number 2.) + 5 Order of operations 6 Remember the acronym PEMDAS when creating your formulas, Parentheses Exponents Multiplication Division Addition Subtraction 7 When calculating a fraction, make sure to put parentheses around any formula used in either the numerator or denominator. 8 For example =(B1+B2)/(C1+C2) 9 Using absolute addresses 1 Once a formula is created, you will often want to copy the formula to other columns and rows. It's important to understand that excel always uses "relative addresses" unless you indicate otherwise by creating an "absolute address". For example, if you are 2 calculating the cost of purchasing 2 boxes of cereal at a cost of $3.95 per box, the formula in cell B28 is =B26*B27. Although we read cell B28 as "Multiply 2 boxes by $3.95", Excel is actually calculating the value in cell B28 as "Multiply the value in the cell in the same column (column B) 2 rows above (row 26) by the value in the cell in the same column 1 row above (row 27). 3
