The following is a condensed balance sheet for the Albinitree Corporation.
Albinitree Corporation
Balance Sheet as at December 31, 2010
Assets($000)
Cash ......................................................50,000
Accounts receivable .....................................90,000
Inventory .................................................65,000
Land ......................................................130,000
Property, plant, and equipment (net) ................ 95,000
Total assets .............................................. 430,000
Liabilities
Accounts payable .......................................25,000
Taxes payable ............................................65,000
Accrued wages payable ................................50,000
Bonds payable (due in 2020) .......................... 150,000
Total liabilities .......................................... 290,000
Shareholders' equity
Common shares ........................................80,000
Retained earnings .....................................60,000
Total shareholders' equity............................. 140,000
Total liabilities and shareholders' equity ............ 430,000
Sales totalled $500 million, with 90% on credit; gross profit was $220 million; purchases were $300 million, with 70% on credit; and Albinitree employed 4,000 employees.
Required:
Calculate the following:
(a) Current ratio
(b) Acid test ratio
(c) Sales revenue per employee
(d) Leverage ratio
(e) Sales revenue to capital employed
(f) Inventory at the start of the year
(g) Average inventory turnover period
(h) Gross profit margin
(i) Average collection period for receivables
(j) Average payment period for payables.