The 2024 income statement of Adrian Express reports sales of $19,310,000, cost of goods sold of $12,250,000, and net income of $1,700,000. Balance sheet information is provided in the following table.

Industry averages for the following four risk ratios are as follows:

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? Explain your answer.

Transcribed Image Text:

Assets Current assets: Cash Accounts receivable Inventory Long-term assets Total assets ADRIAN EXPRESS Balance Sheets December 31, 2024 and 2023 Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Common stock Retained earnings Total liabilities and stockholders' equity 2024 $ 700,000 1,600,000 2,000,000 4,900,000 $9,200,000 $1,920,000 2,400,000 1,900,000 2,980,000 $9,200,000 2023 $ 860,000 1,100,000 1,500,000 4,340,000 $7,800,000 $1,760,000 2,500,000 1,900,000 1,640,000 $7,800,000