Question

Seved Help Week 3: Homework 7 2821 Income Statement Net sales $1e, Bee Cost of goods sold (6,55e) Gross profit 3,450 Operating expenses (2,350 Interest expense (389 Income tax expense (320 Net Income 480 10 points eBook Comparative Balance Sheets Dec 31 2021 Assets Cash Accounts receivable Inventory Property, plant, and equipment (net) $780 70e sie be Be 55,360 34, see $1,760 $1.450 Liabilities and Shareholders' Equity Current liabilities Bonds payable Cont stock Retard earnings 856 Required: Calculate the following ratios for 2021. (Consider 365 days a year. Do not round intermediate ca round your final answers to 2 decimal places.) 1. Inventory turnover ratio 2. Serage din inventory WHE RE

Answer 1

calculate the following ratios for 3. Receivables turnover Ratio 2021 Receivables turnover Ratio Net Credit sales 1. Inventory turnover Radio Average Receivables Inventory turnover Ratio cost of Sold $ 10,000 goods Average inventory 600 = 16.66 times = $ 6550 $ 800 2.19 times Note: Average Receivables Beginning Receivables & Ending Receivables 2 Note: $ 500 + $ 700 Average inventory = Beginning inventory + Ending Inventory 2 $ 600 2 $700 + $ 900 2 4. Average collection period Average collection perod = No. of days in a year Receivables turnover Patio $ 800 2. Average days is inventory = 365 days Average days in inventory No. of days in year 16.66 Inventory turnover Ratio 365 days = 21.91 days - = 44.56 days 8.19

S. Assets turnover Ratio 7. Return on Assek Assets turnover pato sales Return on Assets & Net income x 100 Average o pecabing Assen Average arets $ 480 $ 10.000 X 100 $ 5100 $S100 = 1.96 times = 9.41 / approximately 8. Return on Equity Note: Average Opmoking Assels Return on Equity = net income X 100 Beginning aneks + Ending aneh Average Equity $ 480 $ 1625 X 100 $4900 + $ 5300 - 29.547. Opproximately $ 5100 Nole calculation of Average Equity 6. poolt margin on sales 2021 2020 prokir morgin on sales = Net income, sales X 100 Common stock $ 700 $ 700 $ 1000 $ 850 $4&O # 10000 X100 (+) Retained Earrings Total Equity 9 100 $1550 = 4.80% approximately Average Equity = Beginning Equity & Ending Equity 2 $1550 + $ 1700 $ 1625

9. Equity multiplier Equity multiplier Average Assets Average Stock holdes Equity $ S100 $1625 3.14 times 10. Return on Equity Returnon Equity = Equity multiplier X Return 00 Assets 3.14 x 9.41.%. 29.55% approximately