Required: 1. Calculate the following risk ratios for 2024: 2. When we compare two companies, can one have a higher current ratio while the other has a higher acid-test ratio? 3. Calculate the following risk ratios for 2024: (Round your answers to 1 decimal place.) Risk Ratios a. Receivables turnover ratio times b. Inventory turnover ratio times c. Current ratio d. Acid-test ratio e. Debt to equity ratio %
The
| PLASMA SCREENS CORPORATION | ||
| Balance Sheets | ||
| December 31, 2024 and 2023 | ||
| 2024 | 2023 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash | $242,000 | $130,000 |
| 98,000 | 102,000 | |
| Inventory | 105,000 | 90,000 |
| Investments | 5,000 | 3,000 |
| Long-term assets: | ||
| Land | 580,000 | 580,000 |
| Equipment | 890,000 | 770,000 |
| Less: |
(528,000) | (368,000) |
| Total assets | $1,392,000 | $1,307,000 |
| Liabilities and |
||
| Current liabilities: | ||
| Accounts payable | $109,000 | $95,000 |
| Interest payable | 7,000 | 13,000 |
| Income tax payable | 9,000 | 6,000 |
| Long-term liabilities: | ||
| Notes payable | 110,000 | 220,000 |
| Stockholders' equity: | ||
| Common stock | 800,000 | 800,000 |
| 357,000 | 173,000 | |
| Total liabilities and stockholders' equity | $1,392,000 | $1,307,000 |
Additional information for 2024:
- Net income is $184,000.
- Sales on account are $1,890,000.
- Cost of goods sold is $1,394,250.
Required:
1. Calculate the following risk ratios for 2024:
2. When we compare two companies, can one have a higher
3.
Calculate the following risk ratios for 2024: (Round your answers to 1 decimal place.)
|
|
|
RATIO ANALYSIS
Ratio analysis is the process of determining and interpreting numerical relationships based on financial statements. Ratio analysis provides a measure of the relationship between variables or figures. This relationship can be expressed as percent or as a quotient.
Ratio analysis helps to measure the Liquidity position, Solvency Position & Operating Efficiency of an Organisation.
Step by step
Solved in 6 steps
