The balance sheets for Plasma Screens Corporation and additional information are provided below. Required: 1. Calculate the
Question:
The balance sheets for Plasma Screens Corporation and additional information are provided below.
Required:
1. Calculate the following risk ratios for 2024:
a. Receivables turnover ratio.
b. Inventory turnover ratio.
c. Current ratio.
d. Acid-test ratio.
e. Debt to equity ratio.
2. When we compare two companies, can one have a higher current ratio while the other has a higher acid-test ratio? Explain your answer.
Assets Current assets: Cash Accounts receivable Inventory Investments Long-term assets: Land PLASMA SCREENS CORPORATION Balance Sheets December 31, 2024 and 2023 Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 2024 $ 242,000 98,000 105,000 5,000 580,000 890,000 (528,000) $1,392,000 $ 109,000 7,000 9,000 110,000 800,000 357,000 $1,392,000 2023 $ 130,000 102,000 90,000 3,000 580,000 770,000 (368,000) $1,307,000 $ 95,000 13,000 6,000 220,000 800,000 173,000 $1,307,000
Step by Step Answer:
Risk ratios for 2024a Receivables turnover ratio Net Credit Sales Average Accounts ReceivableNet Cre...View the full answer
Related Video
Inventory turnover is a key metric that helps businesses evaluate the efficiency of their operations. A high turnover ratio is generally considered positive, indicating that the company is effectively selling its inventory and making efficient use of its resources. On the other hand, a low turnover ratio may indicate issues such as overstocking or slow sales and may require further examination to identify and address the underlying causes. Businesses use this ratio to make decisions about inventory levels, production schedules, and pricing strategies. It also helps businesses to identify areas where they may need to make improvements, such as reducing lead times for production or optimizing sales and marketing efforts. Additionally, inventory turnover is used by investors and analysts as a key performance indicator to evaluate the financial health and growth potential of a company.
Students also viewed these Business questions
-
The balance sheets for Plasma Screens Corporation and additional Information are provided below. PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets:...
-
Refer to the information provided for Plasma Screens Corporation in E127. In E127, The balance sheets for Plasma Screens Corporation and additional information are provided below. Required: 1....
-
Balance sheets for Plasma Screens Corporation along with additional information are provided below. Additional Information for 2015: 1. Net income is $95,000. 2. Sales on account are $1,800,000. 3....
-
Task 1 You need to produce a report that demonstrates analytical and practical skills and use these to explain the effects of loads on pin-jointed frames, suggesting improvements to the structures....
-
Suppose that you were put in charge of a virtual team whose members are located in different cities around the country or region. What tactics could you use to build and maintain team trust, as well...
-
Suppose your elasticity of demand for your parking-lot spaces is -2, and the price is $8 per day. If you MC is zero, and you capacity is 80% full at 9 A.M. over the last month, are you optimizing?
-
For a constant pressure process (a) \(d H=C_{V} d T\) (b) \(d H=\int C_{V} d T\) (c) \(d H=C_{P} d T\) (d) \(d H=d Q_{P}\).
-
On January 1, Year 5, Pic Company acquired 7,500 ordinary shares of Sic Company for $600,000. On January 1, Year 6, Pic Company acquired an additional 2,000 ordinary shares of Sic Company for...
-
Q1. What are the risksrisks undertaken by firms pursuing a focus strategy? Explain with two examples. Q2. What are four specific criteria that managers can use to decide which of their firm's...
-
Your senior auditor instructed you to prepare a four-column proof of cash receipts and disbursements for the month of August 2014. The bank reconciliation prepared by FAILNOT Company at July 31 is...
-
The following condensed information is reported by Sporting Collectibles. Required: 1. Calculate the following profitability ratios for 2024: a. Gross profit ratio. b. Return on assets. c. Profit...
-
Roseburg Corporation manufactures cardboard containers. In 2017, the company purchased several large tracts of timber for $20 million with the intention of harvesting its own timber rather than...
-
An ideal gas, initially at 25(C and 1 bar, undergoes the following cyclic processes in a closed system: (a) In mechanically reversible processes, it is first compressed adiabatically to 5 bar, then...
-
Under what circumstances is it appropriate to record goodwill in the accounts? How should goodwill, properly recorded on the books, be written off in order to conform with IFRS?
-
Manchester United, Inc. sold 10,000 season tickets at 2,000 each. By December 31, 2015, 8 of the 20 home games had been played. What amount should be reported as a current liability at December 31,...
-
Define a restructuring. What costs should not be accrued in a restructuring?
-
The book basis of depreciable assets for Erwin Co. is 900,000 and the tax basis is 700,000 at the end of 2015. The enacted tax rate is 34% for all periods. Determine the amount of deferred taxes to...
-
Where in the financial statements are preference shares normally reported?
-
On January 1, Campus Internet Connection opened for business across the street from Upper Eastern University. The company charges students a monthly fee of $20 and $ 1 for each hour they are online....
-
Determine the volume of the parallelepiped of Fig. 3.25 when (a) P = 4i 3j + 2k, Q = 2i 5j + k, and S = 7i + j k, (b) P = 5i j + 6k, Q = 2i + 3j + k, and S = 3i 2j + 4k. P
-
Universal Calendar Company began the year with accounts receivable and inventory balances of $100,000 and $80,000, respectively. Year-end balances for these accounts were $120,000 and $60,000,...
-
The 2011 income statement for Anderson TV and Appliance reported sales revenue of $420,000 and net income of $65,000. Average total assets for 2011 was $800,000. Shareholders' equity at the beginning...
-
Refer to the facts described inBE 5-15. Show the DuPont framework's calculation of the three components of the 2011 return on shareholders' equity for Anderson TV and Appliance. In BE 5-15, the 2011...
-
Given vectors, v = (1, 1) and w = (5, 4), find the following. v+w= ||vw|| = ||v|| + |||| =
-
If a bank savings account with $ 2 , 4 1 0 will be worth $ 3 , 9 2 1 in 2 years, and if the interest rate is constant, what is the interest rate quote that the bank would post in its window?
-
Solve x2-24x+14= 0
Study smarter with the SolutionInn App