- Use ratios to analyze a company's liquidity and solvency.
1 Condensed financial statements for Games Galore are summarized below: 2 3 Balance Sheet 4 Cash 2016 2015 185,000 $ 143,000 5 Accounts Receivable, Net 6 Inventory 7 Prepaid Insurance 80,000 59,000 134,000 104,000 11,900 5,880 Total Current Assets 380,900 341,880 9 Property and Equipment, Net 514,500 407,000 895,400 $ 10 Total Assets 748,880 11 12 Current Liabilities 85,300 $ 96,800 13 Long-term Liabilities 284,000 224,000 14 Total Liabilities 369,300 320,800 15 Contributed Capital 16 Retained Earnings 299,000 299,000 129,080 227,100 Total Stockholders' Equity 17 428,080 526,100 18 Total Liabilities and Stockholders' Equity 895,400 $ 748,880 19 20 Income Statement 21 Net Sales (all on account) $ 3,031,000 22 Cost of Goods Sold 1,949,000 23 Gross Profit 1,082,000 24 Onerating Exnenses 891.400 Sheet1 READY 100% 24 Operating Expenses 25 Income from Operations 891,400 190,600 26 Interest Expense 14,500 27 Income before Income Tax Expense 28 Income Tax Expense 29 Net Income 176,100 47,000 129,100 30 31 Required: 32 Compute the following liquidity ratios for 2016. Round to the 33 required number of decimal places USING THE EXCEL. 34 ROUND FUNCTION (fx). 35 Current ratio (rounded to one decimal place) to 1 36 Receivables turnover (rounded to two decimal places) times days 37 Days to collect (rounded to the nearest whole day) 38 Inventory turnover (rounded to two decimal places) times days 39 Days' sales in inventory (rounded to the nearest day) 40 41 Compute the following Solvency Ratios for 2016. Again, USE 42 THE EXCEL ROUND FUNCTION (fx). 43 Debt to assets (rounded to two decimal places) to 1 times 44 Times interest earned (rounded to one decimal place) 45 46 Compute the following Profitability Ratios for 2016. Again, USE 47 THE EXCEL ROUND FUNCTION (fx). Sheet1 READY + 100% 32 Compute the following liquidity ratios for 2016. Round to the 33 required number of decimal places USING THE EXCEL. 34 ROUND FUNCTION (fx). Current ratio (rounded to one decimal place) 35 to 1 36 Receivables turnover (rounded to two decimal places) times days 37 Days to collect (rounded to the nearest whole day) Itimes 38 Inventory turnover (rounded to two decimal places) days 39 Days' sales in inventory (rounded to the nearest day) 40 41 Compute the following Solvency Ratios for 2016. Again, USE 42 THE EXCEL ROUND FUNCTION (fx). 43 to 1 Itimes Debt to assets (rounded to two decimal places) 44 Times interest earned (rounded to one decimal place) 45 46 Compute the following Profitability Ratios for 2016. Again, USE 47 THE EXCEL ROUND FUNCTION (fx). percent 48 Profit margin ratio (rounded to one decimal place) 49 Gross margin ratio (rounded to one decimal place) percent 50 51 52 53 Sheet1 +. + 100% READY B
