Lendell Company has these comparative balance sheet data:

Additional information for 2025:

1. Net income was \(\$ 25,000\).

2. Sales on account were \(\$ 375,000\). Sales returns and allowances amounted to \(\$ 25,000\).

3. Cost of goods sold was \(\$ 198,000\).

4. Net cash provided by operating activities was \(\$ 48,000\).

5. Capital expenditures were \(\$ 25,000\), and cash dividends paid were \(\$ 10,000\).

6. The bonds payable are due in 2038 .

Instructions

Compute the following ratios at December 31, 2025.

a. Current ratio.

b. Accounts receivable turnover.

c. Average collection period.

d. Inventory turnover.

e. Days in inventory.

f. Free cash flow.

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Lendell Company Balance Sheets December 31 Cash Accounts receivable (net) Inventory Plant assets (net) Accounts payable Bonds payable (15%) Common stock, $10 par Retained earnings 2025 $ 15,000 70,000 60,000 200,000 $345,000 $ 50,000 100,000 140,000 55,000 $345,000 2024 $ 30,000 60,000 50,000 180,000 $320,000 $ 60,000 100,000 120,000 40,000 $320,000