The 2024 income statement of Adrian Express reports sales of $17,931,000, cost of goods sold of $11,154,000, and net income of $1,660,000. Balance sheet information is provided in the following table. ADRIAN EXPRESS Balance Sheets Assets Current assets: Cash Accounts receivable December 31, 2024 and 2023 2024 $660,000 1,520,000 Inventory Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Long-term debt Common stock Retained earnings 2023 1,920,000 4,860,000 $ 8,960,000 $ 1,960,000 2,360,000 1,940,000 2,700,000 $ 820,000 1,060,000 1,460,000 4,300,000 $ 7,640,000 $ 1,720,000 2,460,000 1,940,000 1,520,000 Total liabilities and stockholders' equity $ 8,960,000 $ 7,640,000 Industry averages for the following four ratios are as follows: Average collection period Average days in inventory Current ratio Debt to equity ratio Required: 26 days 63 days 2 to 1 35% 1. Calculate the four ratios listed above for Adrian Express in 2024 assuming all sales are on credit and current liabilities consist of accounts payable and salaries payable. 2. Do you think the company is more or less efficient at managing its current assets than the industry average? 3. Do you think the company is more risky or less risky than the industry average? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 1. Calculate the four ratios listed above for Adrian Express in 2024 assuming all sales are on credit and current liabilities consist of accounts payable and salaries payable. Note: Use 365 days in a year. Round your answers to 1 decimal place. Do not round your intermediate calculations. Average collection period Ratios Average days in inventory Current ratio Debt to equity ratio 26.3 days 55.3 days 2.0 to 1 % Reg 1 Req 2 and 3>

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 $17,931,000, cost of goods sold of $11,154,000, and net income of
$1,660,000. Balance sheet information is provided in the following table.
ADRIAN EXPRESS
Balance Sheets
Assets
Current assets:
Cash
Accounts receivable
December 31, 2024 and 2023
2024
$660,000
1,520,000
Inventory
Long-term assets
Total assets
Liabilities and Stockholders' Equity
Current liabilities
Long-term debt
Common stock
Retained earnings
2023
1,920,000
4,860,000
$ 8,960,000
$ 1,960,000
2,360,000
1,940,000
2,700,000
$ 820,000
1,060,000
1,460,000
4,300,000
$ 7,640,000
$ 1,720,000
2,460,000
1,940,000
1,520,000
Total liabilities and stockholders' equity
$ 8,960,000
$ 7,640,000
Industry averages for the following four ratios are as follows:
Average collection period
Average days in inventory
Current ratio
Debt to equity ratio
Required:
26 days
63 days
2 to 1
35%
1. Calculate the four ratios listed above for Adrian Express in 2024 assuming all sales are on credit and current liabilities consist of
accounts payable and salaries payable.
2. Do you think the company is more or less efficient at managing its current assets than the industry average?
3. Do you think the company is more risky or less risky than the industry average?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 and 3
1. Calculate the four ratios listed above for Adrian Express in 2024 assuming all sales are on credit and current liabilities
consist of accounts payable and salaries payable.
Note: Use 365 days in a year. Round your answers to 1 decimal place. Do not round your intermediate calculations.
Average collection period
Ratios
Average days in inventory
Current ratio
Debt to equity ratio
26.3 days
55.3 days
2.0 to 1
%
Reg 1
Req 2 and 3>
Transcribed Image Text:The 2024 income statement of Adrian Express reports sales of $17,931,000, cost of goods sold of $11,154,000, and net income of $1,660,000. Balance sheet information is provided in the following table. ADRIAN EXPRESS Balance Sheets Assets Current assets: Cash Accounts receivable December 31, 2024 and 2023 2024 $660,000 1,520,000 Inventory Long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Long-term debt Common stock Retained earnings 2023 1,920,000 4,860,000 $ 8,960,000 $ 1,960,000 2,360,000 1,940,000 2,700,000 $ 820,000 1,060,000 1,460,000 4,300,000 $ 7,640,000 $ 1,720,000 2,460,000 1,940,000 1,520,000 Total liabilities and stockholders' equity $ 8,960,000 $ 7,640,000 Industry averages for the following four ratios are as follows: Average collection period Average days in inventory Current ratio Debt to equity ratio Required: 26 days 63 days 2 to 1 35% 1. Calculate the four ratios listed above for Adrian Express in 2024 assuming all sales are on credit and current liabilities consist of accounts payable and salaries payable. 2. Do you think the company is more or less efficient at managing its current assets than the industry average? 3. Do you think the company is more risky or less risky than the industry average? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 1. Calculate the four ratios listed above for Adrian Express in 2024 assuming all sales are on credit and current liabilities consist of accounts payable and salaries payable. Note: Use 365 days in a year. Round your answers to 1 decimal place. Do not round your intermediate calculations. Average collection period Ratios Average days in inventory Current ratio Debt to equity ratio 26.3 days 55.3 days 2.0 to 1 % Reg 1 Req 2 and 3>
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