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The 2024 income statement of Adrian Express reports sales of $14,706,000, cost of goods sold of $8,624,000, and net income of $1,560,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable Inventory ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities. Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Average collection period Average days in inventory Current ratio Debt to equity ratio 25 days 60 days 2 to 1 50% 2024 2023 $560,000 1,320,000 1,720,000 1,360,000 4,760,000 4,200,000 $8,360,000 $7,240,000 1,920,000 2,200,000 $8,360,000 $720,000 960,000 $1,980,000 $1,620,000 2,260,000 2,360,000 1,920,000 1,340,000 $7,240,000 Required: 1. Calculate the four risk ratios listed above for Adrian Express in 2024. ? Do you think the company is more risky or less risky than the industry average?

The 2024 income statement of Adrian Express reports sales of $14,706,000, cost of goods sold of $8,624,000, and net income of $1,560,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable Inventory ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities. Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Average collection period Average days in inventory Current ratio Debt to equity ratio 25 days 60 days 2 to 1 50% 2024 2023 $560,000 1,320,000 1,720,000 1,360,000 4,760,000 4,200,000 $8,360,000 $7,240,000 1,920,000 2,200,000 $8,360,000 $720,000 960,000 $1,980,000 $1,620,000 2,260,000 2,360,000 1,920,000 1,340,000 $7,240,000 Required: 1. Calculate the four risk ratios listed above for Adrian Express in 2024. ? Do you think the company is more risky or less risky than the industry average?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The 2024 income statement of Adrian Express reports sales of $14,706,000, cost of goods sold of $8,624,000, and net income of $1,560,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable Inventory ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Average collection period Average days in inventory Current ratio Debt to equity ratio 25 days 60 days 2 to 1 50% 2024 2023 $560,000 1,320,000 1,720,000 4,760,000 $8,360,000 $7,240,000 Required: 1. Calculate the four risk ratios listed above for Adrian Express in 2024. 2. Do you think the company is more risky or less risky than the industry average? $720,000 960,000 1,360,000 4,200,000 $1,980,000 $1,620,000 2,260,000 2,360,000 1,920,000 2,200,000 $8,360,000 1,920,000 1,340,000 $7,240,000
Transcribed Image Text:The 2024 income statement of Adrian Express reports sales of $14,706,000, cost of goods sold of $8,624,000, and net income of $1,560,000. Balance sheet information is provided in the following table. Assets Current assets: Cash Accounts receivable Inventory ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity Industry averages for the following four risk ratios are as follows: Average collection period Average days in inventory Current ratio Debt to equity ratio 25 days 60 days 2 to 1 50% 2024 2023 $560,000 1,320,000 1,720,000 4,760,000 $8,360,000 $7,240,000 Required: 1. Calculate the four risk ratios listed above for Adrian Express in 2024. 2. Do you think the company is more risky or less risky than the industry average? $720,000 960,000 1,360,000 4,200,000 $1,980,000 $1,620,000 2,260,000 2,360,000 1,920,000 2,200,000 $8,360,000 1,920,000 1,340,000 $7,240,000
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