Notes:a. The firm has an 8-year financial lease requiring annual beginning-of-year payments of $50,000. Five years of the lease have yet to run.b. Annual credit purchases of $6,200,000 were made during the year.c. The annual principal payment on the long-term debt is $100,000.d. On December 31, 2012, the firm's common stock closed at $39.50 per share.Questions:1. What is the current ratio?2. What is the quick ratio?3. What is the inventory turnover? Case 1Given the following financial statements historical ratios, and industry averages, calculate Stering Company's financial ratios for themost recent year. (Assume a 365-day year.)Sterling Company Income Statement for the Year Ended December 31, 2012I D.00007.500,.0002500.000Sales reverueLess Cost of Goods SoldGross ProfitsLess: Operating expensesSelling espenseGereral and admiristralive expene300.000650.00050.000Lease espenseDepreciation expense200.000Total operaling espenseOperating profitsLess Irterest erpense1200.0001300,000200.000Net profit before taxesLess Taxes (rale - 40)Net profit after taxes100.000440.000660.000Less: Preferred stock dvidenda50.000Eamrings avalable for common stockholders610.000Earings per shareSterling Company Bal arnce Sheet as of December 31, 2012AssetsLiabilities & Stockholdera' EquliyAccourts payableNotes payableAccrualsCash200.000s00.000Marketable SecuritesAccounts receivable50.00200.000800.0000.0001200,0003.000.000Inventories950.000Taal currert liabilitiesTotal current assets2000.000Gros fixed assets (at cost)Long-term debt (include financial leases)Tolal liabilities200004.200,000300000L000.000Preferred stock (25,000 shares. $2 dividend)Common stiock (200.000 shares at $3 par)Paidin capital in excess of par value-commonLess Accumulated depreciationNet fired asseta9.000.000600.000Other assets1000.00012.000005.00.000Total assetsRelained earrings1000.000Total stockholders' equtyTotal liabilities & stockholders' equity7.800.00012.000.000

Name: Notes:a. The firm has an 8-year financial lease requiring annual begin
Uploaded: 2022-11-18T00:26:54.000Z
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Description: Notes:a. The firm has an 8-year financial lease requiring annual beginning-of-year payments of $50,000. Five years of the lease have yet to run.b. Annual credit purchases of $6,200,000 were made during the year.c. The annual principal payment on the