Question

PLEASE FIND THE FINANCIAL RATIOS IN BELOW

Financial Ratios

The financial statements for Jackson Enterprises (income statement, statement of owner’s equity, and balance sheet) are shown.

Jackson Enterprises Income Statement For Year Ended December 31, 20--
Revenue from sales:
Sales			$170,000
Less: Sales returns and allowances			10,000
Net sales				$160,000
Cost of goods sold:
Merchandise inventory, January 1, 20--		$6,600
Estimated returns inventory, January 1, 20--		1,400	$8,000
Purchases		$92,870
Less: Purchases returns and allowances	$1,896
Purchases discounts	1,888	3,784
Net purchases		$89,086
Add: Freight-in		927
Cost of goods purchased			90,013
Goods available for sale			$98,013
Less: Merchandise inventory, Dec. 31, 20--		$8,320
Estimated returns inventory, Dec. 31, 20--		1,180	9,500
Cost of goods sold				88,513
Gross profit				$71,487
Operating expenses:
Wages expense			$38,362
Advertising expense			1,168
Supplies expense			392
Phone expense			2,142
Utilities expense			10,804
Insurance expense			878
Depreciation expense—building			4,300
Depreciation expense—equipment			3,700
Miscellaneous expense			536
Total operating expenses				62,282
Income from operations				$9,205
Other revenues:
Interest revenue			$1,960
Other expenses:
Interest expense			944	1,016
Net income				$10,221

Jackson Enterprises Statement of Owner's Equity For Year Ended December 31, 20--
J. B. Gray, capital, January 1, 20--		$85,569
Net income for the year	$10,221
Less: Withdrawals for the year	8,000
Increase in capital		2,221
J. B. Gray, capital, December 31, 20--		87,790

Jackson Enterprises Balance Sheet December 31, 20--
Assets
Current assets:
Cash		$21,100
Accounts receivable		18,890
Merchandise inventory	8,320
Estimated returns inventory	1,180	9,500
Supplies		1,400
Prepaid insurance		900
Total current assets			$51,790
Property, plant, and equipment:
Building	$89,500
Less: Accumulated depreciation-building	27,000	$62,500
Equipment	$34,000
Less: Accumulated depreciation-equipment	7,100	26,900
Total property, plant, and equipment			89,400
Total assets			$141,190
Liabilities
Current liabilities:
Accounts payable	$10,850
Customer refunds payable	1,450
Wages payable	500
Sales tax payable	1,100
Mortgage payable (current portion)	730
Total current liabilities		$14,630
Long-term liabilities:
Mortgage payable	$39,500
Less: Current portion	730	38,770
Total liabilities			$53,400
Owner's Equity
J. B. Gray, capital			87,790
Total liabilities and owner's equity			$141,190

Compute the following financial ratios. All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was $21,100.

Round answers to one decimal place.

Jackson Enterprises
December 31, 20--
Working capital	$
Current ratio		to 1
Quick ratio		to 1
Return on owner's equity	%
Accounts receivable turnover
Average number of days required to collect receivables	days
Inventory turnover
Average number of days required to sell inventory	days

Answer 1

Anso09 Working capital- Cuvunt assete-cwsound liabilities , 51190 - 14630 Working capital - 31/60 2) currund sativ , current assets cwount liabilities 51490 23.5 141630 3) Queck_gatio - cleant asset les pospaidol inyerdou clouent liabilities 251790-900-9500 : 11390 1998 14630 _14630 24)|Reteun en olencei equity: Net Income auneuequity PO2U1 = 11.6.1 81190 6) Account sueceivable tunoveu credit sales Average Accounts receivable 160000 160000.2160000 8 timer U100+18890 39990 199015 2 b) Average number of days.ouquined to called soclivableday Aveling Accoulte ocavable x365 Net credit sales Account receivable Cavenage 21100118.890:39490/2-19995 2

2 19995_36.5_c15:6 days 160000 1) Inventory turnoveg - cost of yoods sold Area dgl. inventores :88513 29.3.2 9500 8) Average number of days required to sell inverter Inventory_*°365 cost of foods, seld :9500, X3052 39.1 days 88513 Answouus: Jackson Enterprises Decembe,.31.20. Working capital 31160 currunt gatio 3.5.10 Quick ratio 2.8 ito: Retewen en Owned equity 11.64 Accaints suceivable u nove 8 times Arenage numbes of days required sto collect sucůvables 15.60ay Inventory tegenoves Arosage number of days ruequüssed 9.3 to sell inventory 39.1days
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