Question

The balance sheets for Plasma Screens Corporation and additional information are provided below.


Additional Information for 2015:
1. Net income is $79,000.
2. Sales on account are $1,890,000.
3. Cost of goods sold is $1,394,250.

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. When we compare two companies, can one have a higher current ratio while the other has a higher acid-test ratio? Explain youranswer.


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  • CreatedJuly 15, 2014
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