Balance sheets for Plasma Screens Corporation along with additional information are provided below. Additional Information for 2015:
Question:
Additional Information for 2015:
1. Net income is $95,000.
2. Sales on account are $1,800,000.
3. Cost of goods sold is $1,100,000.
Required:
1. Calculate the following risk ratios for 2015:
a. Receivables turnover ratio.
b. Inventory turnover ratio.
c. Current ratio.
d. Acid-test ratio.
e. Debt to equity ratio.
2. For the same company, will the current ratio always be higher than the acid-test ratio? Explain youranswer.
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
Question Posted: