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Item 5

Item 5 30 points

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02:04:17

Hyrkas Corporation's most recent balance sheet and income statement appear below:

Balance Sheet
December 31, Year 2 and Year 1
(in thousands of dollars)
	Year 2			Year 1
Assets
Current assets:
Cash	$	250		$	390
Accounts receivable, net		420			440
Inventory		390			360
Prepaid expenses		20			20
Total current assets		1,080			1,210
Plant and equipment, net		1,360			1,540
Total assets	$	2,440		$	2,750
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	360		$	390
Accrued liabilities		50			50
Notes payable, short term		40			40
Total current liabilities		450			480
Bonds payable		350			635
Total liabilities		800			1,115
Stockholders equity:
Common stock, $2 par value		200			200
Additional paid-in capital		330			330
Retained earnings		1,110			1,105
Total stockholders equity		1,640			1,635
Total liabilities & stockholders equity	$	2,440		$	2,750

Income Statement
For the Year Ended December 31, Year 2
(in thousands of dollars)
Sales (all on account)	$	1,620
Cost of goods sold		1,050
Gross margin		570
Selling and administrative expense		530
Net operating income		40
Interest expense		20
Net income before taxes		20
Income taxes (30%)		6
Net income	$	14

Dividends on common stock during Year 2 totaled $9 thousand. The market price of common stock at the end of Year 2 was $3.00 per share.

Required:

Compute the following for Year 2:

m. Average collection period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.)

n. Inventory turnover. (Round your answer to 2 decimal places.)

o. Average sale period. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.)

p. Times interest earned ratio. (Round your answer to 2 decimal places.)

q. Debt-to-equity ratio. (Round your answer to 2 decimal places.)