Zap Electronics reported the following for the fiscal years ended January 31, 2011, and January 31, 2010:
Assume all sales are on credit and the firm has no preferred stock outstanding. Calculate the following ratios:
| 1. | Current ratio (for both years) |
| 2. | Accounts receivable turnover ratio (for 2011) |
| 3. | Inventory turnover ratio (for 2011) |
| 4. | Debt-to-equity ratio (for both years) |
| 5. | Return on equity ratio (for 2011) |
Do any of these ratios suggest problems for the company?
January 31 (in thousands) Accounts receivable Inventory Current assets Current liabilities Long-term liabilities Shareholders' equity Sales Cost of goods sold Interest expense Net income 2011 2010 36,184 $ 106,754 174,369 71,616 12,316 121,851 712,855 483,463 335 11,953 24,306 113,875 154,369 68,001 35,200 198,935 580,223 400,126 709 4,706 Zap Electronics reported the following for the fiscal years ended January 31, 2011, and January 31, 2010: Click on the icon to view the balance sheets.) Assume al sales are on credit and the firm has no preferred stock outstanding. Calculate the following ratios: Current rato tfor both years) 2. Accounts receivable tumover ratio (for 2011) 3. Inventory turnover ratio (for 2011) 4. Debt-to-equity ratio (for both years) 5. Return on equity ratio (tor 2011) Do any of these ratios suggest problems for the company? 1. Current ratio (for both years) Begin by selecting the formula used to calculate the current ratio. Then enter the amounts to calulate the current ratio for 2011 and 2010. (Round your answer to two decimal places.) Current ratio 2011 2010 2. Accounts receivable turnover ratio (for 2011) Begin by selecting the formula used to calculate accounts receivable turnover. Then enter the amounts to calculate the accounts receivable turnover ratio for 2011. (Round the average net accounts receivable to the nearest dollar and the final answer to two decimal places.) Accounts recelvable tumover Choose from any list or enter any number in the input fields and then continue to the next question. 3. Inventory turnover ratio (for 2011) Begin by selecting the formula used to calculate inventory turnover. Then enter the amounts to calculate the inventory turnover ratio for 2011. Round the average inventory to the nearest dollar and the final answer to two decimal places.) -Inventory tumover ratio 4. Debt-to-equity ratio (for both years) Begin by selcting the formula used to calculatethe debt-to-equity ratio for 2011 and 2010. (Round your answer to two decimal places.) - Debt to equity Year 2011 2010 5. Return on equity ratio (for 2011) Begin by selecting the formula used to calculate return on equity. Then enter the amounts to calculate return on equity for 2011. (Round the average common shareholders' equity to the nearest dollar and the final answer to two decimal places. - Return on equity Do any of these ratios suggest problems for the company? The ratios indicate that the company has iquidity and solvency. The proportion of debt financing has risk
