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?
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?
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter2: Financial Statements, Cash Flow,and Taxes
Section: Chapter Questions
Problem 1Q: Define each of the following terms:
Annual report; balance sheet; income statement
Common...
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![The balance sheets for Monitor World Corporation and additional information are provided below.
MONITOR WORLD CORPORATION
Balance Sheets
December 31, 2024 and 2023
Assets
Current assets:
Cash
Accounts receivable
Inventory
Investments
Long-term assets:
Land
Equipment
Less: Accumulated depreciation
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Interest payable
Income tax payable
Long-term liabilities:
Notes payable
Stockholders' equity:
Common stock
Retained earnings
Total liabilities and stockholders' equity
Additional information for 2024:
1. Net income is $128,400.
2. Sales on account are $1,702,000.
3. Cost of goods sold is $1,276,500.
Complete this question by entering your answers in the tabs below.
a. Receivables turnover ratio
b. Inventory turnover ratio
c. Current ratio
d. Acid-test ratio
e. Debt to equity ratio
2024
times
times
$176,400
88,000
100,000
4,500
%
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?
Required 1 Required 2
Calculate the following risk ratios for 2024: (Round your answers to 1 decimal place.)
Risk Ratios
2023
530,000
530,000
840,000
720,000
(478,000) (318,000)
$1,260,900
$1,241,500
$125,000
97,000
85,000
2,500
$104,000
$90,000
6,500
12,500
8,500
5,500
120,000
240,000
750,000
750,000
271,900
143,500
$1,260,900 $1,241,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd1c8773d-3f1d-494c-b776-10604035d8d4%2Fb54814c9-d83f-4e77-ad09-f8b647caeb9d%2Fsxdgyia_processed.png&w=3840&q=75)
Transcribed Image Text:The balance sheets for Monitor World Corporation and additional information are provided below.
MONITOR WORLD CORPORATION
Balance Sheets
December 31, 2024 and 2023
Assets
Current assets:
Cash
Accounts receivable
Inventory
Investments
Long-term assets:
Land
Equipment
Less: Accumulated depreciation
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Interest payable
Income tax payable
Long-term liabilities:
Notes payable
Stockholders' equity:
Common stock
Retained earnings
Total liabilities and stockholders' equity
Additional information for 2024:
1. Net income is $128,400.
2. Sales on account are $1,702,000.
3. Cost of goods sold is $1,276,500.
Complete this question by entering your answers in the tabs below.
a. Receivables turnover ratio
b. Inventory turnover ratio
c. Current ratio
d. Acid-test ratio
e. Debt to equity ratio
2024
times
times
$176,400
88,000
100,000
4,500
%
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?
Required 1 Required 2
Calculate the following risk ratios for 2024: (Round your answers to 1 decimal place.)
Risk Ratios
2023
530,000
530,000
840,000
720,000
(478,000) (318,000)
$1,260,900
$1,241,500
$125,000
97,000
85,000
2,500
$104,000
$90,000
6,500
12,500
8,500
5,500
120,000
240,000
750,000
750,000
271,900
143,500
$1,260,900 $1,241,500
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