wing income statement and balance sheets for Laser World are provided:   LASER WORLD Income Statement For the year-ended December 31, 2021 Sales revenue $ 2,260,000   Cost of goods sold   1,500,000   Gross profit   760,000   Expenses:       Operating expenses   345,000   Depreciation expense   66,000   Loss on sale of land   4,600

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
icon
Concept explainers
Question

The following income statement and balance sheets for Laser World are provided:

 

LASER WORLD
Income Statement
For the year-ended December 31, 2021
Sales revenue $ 2,260,000  
Cost of goods sold   1,500,000  
Gross profit   760,000  
Expenses:      
Operating expenses   345,000  
Depreciation expense   66,000  
Loss on sale of land   4,600  
Interest expense   24,000  
Income tax expense   58,000  
Total expenses   497,600  
Net income $ 262,400  
 

 

LASER WORLD    
Balance Sheet    
December 31    
  2021 2020
Assets    
Current assets:    
Cash $127,000 $104,000
Accounts receivable 91,000 72,000
Inventory 200,000 180,000
Prepaid rent 12,000 12,000
Long-term assets:    
Land 270,000 210,000
Equipment 270,000 220,000
Accumulated depreciation (74,000) (46,000)
Total assets $896,000 $752,000
Liabilities and Stockholders' Equity    
Current liabilities:    
Accounts payable $57,000 $56,000
Interest payable 8,900 7,900
Income tax payable 15,300 12,600
Long-term liabilities:    
Notes payable 380,000 280,000
Stockholders' equity:    
Common stock 140,000 140,000
Retained earnings 294,800 255,500
Total liabilities and equity $896,000 $752,000
     


Assuming that all sales were on account, calculate the following risk ratios for 2021: (Assume 365 days in a year. Round your intermediate calculations and final answers to 1 decimal place.)

 

 
 
Risk Ratios
1. Receivables turnover ratio   times
2. Average collection period   days
3. Inventory turnover ratio   times
4. Average days in inventory   days
5. Current ratio   to 1
6. Acid-test ratio   to 1
7. Debt to equity ratio   %
8. Times interest earned ratio   times
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Completing the Accounting Cycle
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education