Calculate the following ratios for 2020 for Holiday Gifts Galore, Inc.: Industry avergage Average Collection Period: 35 days Debt ratio: 60%Return on Equity: 10.5%Current Ratio: 1.3Inventory Turnover: 8.1TImes interest earned: 2.5Net Profit Margin: 3.78%Return on total assets: 4.36% Based on the ratios you have calculated above, does Holiday Gifts Galore, Inc. appearto be stronger or weaker than the industry average data? Which specific ratios led you tothis conclusion? HOLIDAY GIFTS GALORE, INC.Balance Sheet As of December 31, 20202020DOLLARS% OF ASSETSASSETS:0.86%CashAccounts ReceivableInventoriesTotal Current Assets95,0001,200,0003,200,0004,495,00010.87%29.00%40.73%Net Fixed Assets6,540,00059.27%TOTAL ASSETS11,035,000100.00%LIABILITIES AND EQUITY:Accounts PayableNotes PayableAccrualsTotal Current Liabilities1,750,000800,00075,0002,625,00015.86%7.25%0.68%23.79%Long-Term DebtTOTAL LIABILITIES3,885,0006,510,00035.21%58.99%50,00075,0004,400,0004,525,0000.45%0.68%Common Stock at Par ValuePaid-In Capital in Excess of Par ValueRetained EarningsTOTAL STOCKHOLDERS' EQUITY39.87%41.01%TOTAL LIABILITIES AND EQUITY11,035,000100.00% HOLIDAY GIFTS GALORE, INC.Income Statement for Year Ended December 31, 20202020Sales RevenueCost of Goods SoldGross ProfitSelling ExpenseGeneral and Administrative ExpenseDepreciation ExpenseOperating Profits (EBIT)Interest ExpenseProfit Before TaxesDOLLARS7,800,0004,800,0003,000,0001,540,00095,000% OF SALES100.00%61.54%38.46%19.74%1.22%1.60%125,0001,240,000750,000490,000196,00015.90%9.62%6.28%2.51%3.77%Less: Taxes @ 40%Net Profit After Taxes294,000

Calculate the following ratios for 2020 for Holiday Gifts Galore, Inc.: Industry avergage Average Collection Period: 35 days Debt ratio: 60% Return on Equity: 10.5% Current Ratio: 1.3 Inventory Turnover: 8.1 TImes interest earned: 2.5 Net Profit Margin: 3.78% Return on total assets: 4.36% Based on the ratios you have calculated above, does Holiday Gifts Galore, Inc. appear to be stronger or weaker than the industry average data? Which specific ratios led you to this conclusion?

Calculate the following ratios for 2020 for Holiday Gifts Galore, Inc.: Industry avergage Average Collection Period: 35 days Debt ratio: 60% Return on Equity: 10.5% Current Ratio: 1.3 Inventory Turnover: 8.1 TImes interest earned: 2.5 Net Profit Margin: 3.78% Return on total assets: 4.36% Based on the ratios you have calculated above, does Holiday Gifts Galore, Inc. appear to be stronger or weaker than the industry average data? Which specific ratios led you to this conclusion?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Calculate the following ratios for 2020 for Holiday Gifts Galore, Inc.:

Industry avergage

Average Collection Period: 35 days

Debt ratio: 60%

Return on Equity: 10.5%

Current Ratio: 1.3

Inventory Turnover: 8.1

TImes interest earned: 2.5

Net Profit Margin: 3.78%

Return on total assets: 4.36%

Based on the ratios you have calculated above, does Holiday Gifts Galore, Inc. appear

to be stronger or weaker than the industry average data? Which specific ratios led you to

this conclusion?

HOLIDAY GIFTS GALORE, INC.
Balance Sheet As of December 31, 2020
2020
DOLLARS
% OF ASSETS
ASSETS:
0.86%
Cash
Accounts Receivable
Inventories
Total Current Assets
95,000
1,200,000
3,200,000
4,495,000
10.87%
29.00%
40.73%
Net Fixed Assets
6,540,000
59.27%
TOTAL ASSETS
11,035,000
100.00%
LIABILITIES AND EQUITY:
Accounts Payable
Notes Payable
Accruals
Total Current Liabilities
1,750,000
800,000
75,000
2,625,000
15.86%
7.25%
0.68%
23.79%
Long-Term Debt
TOTAL LIABILITIES
3,885,000
6,510,000
35.21%
58.99%
50,000
75,000
4,400,000
4,525,000
0.45%
0.68%
Common Stock at Par Value
Paid-In Capital in Excess of Par Value
Retained Earnings
TOTAL STOCKHOLDERS' EQUITY
39.87%
41.01%
TOTAL LIABILITIES AND EQUITY
11,035,000
100.00%

HOLIDAY GIFTS GALORE, INC.
Income Statement for Year Ended December 31, 2020
2020
Sales Revenue
Cost of Goods Sold
Gross Profit
Selling Expense
General and Administrative Expense
Depreciation Expense
Operating Profits (EBIT)
Interest Expense
Profit Before Taxes
DOLLARS
7,800,000
4,800,000
3,000,000
1,540,000
95,000
% OF SALES
100.00%
61.54%
38.46%
19.74%
1.22%
1.60%
125,000
1,240,000
750,000
490,000
196,000
15.90%
9.62%
6.28%
2.51%
3.77%
Less: Taxes @ 40%
Net Profit After Taxes
294,000

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