(Computing

ratios)

Use the information from the balance sheet and income statement in the popup window,

to calculate the following ratios:

a. Current ratio

b. Acid-test ratio

c. Times interest earned

d. Inventory turnover

e. Total asset turnover

f. Operating profit margin

g. Days in receivables

h. Operating return on assets

i. Debt ratioj. Return on equity

k. Fixed asset turnover

Balance Sheet
ASSETS
Cash	$90,000
Accounts receivable	32,000
Inventory	50,000
Prepaid expenses	14,000
Total current assets	$186,000
Gross plant and equipment	395,000
Accumulated depreciation	(63,000)
Total assets	$518,000
LIABILITIES AND OWNERS' EQUITY
Accounts payable	$91,000
Accrued liabilities	69,000
Total current liabilities	$160,000
Long-term debt	128,000
Common stock	207,000
Retained earnings	23,000
Total liabilities and equity	$518,000

Income Statement
Sales*	$220,000
Cost of goods sold	(83,000)
Gross profit	$137,000
Selling, general, and administrative expenses	(25,000)
Depreciation expenses	(26,000)
Operating profits	$86,000
Interest expense	(8,000)
Earnings before taxes	$78,000
Taxes	(16,380)
Net income	$61,620
* 12% of sales are cash sales.