Question

Use the data from below. For the most recent year (2014) calculate the following ratios.

1. Current ratio  
2. Inventory turnover
3. Rate of return on total assets
4. Accounts receivable turnover (assume all sales are on account)
5. Debt ratio.

Data:

Nroklesah Company Comparative Balance Sheets and Income Statement For the Years 2013 and 2014 BALANCE SHEETS Assets Cash Accounts receivable Allowance for bad debts Inventory Land Buildings Accumulated depreciation-buildings (80) Total assets 2014 2013 $ 285 300 (25) 135 500 255 $ 200 350 (40) 100 600 275 (75) $1,410$1,370 Liabilities & Owners' Equity Liabilities Accounts payable Wages payable Dividends payable Taxes payable Long-term Bonds pavable Premium on bonds payable Total liabilities Owners' Equit Common stock Retained earnings Total owners' equity Total liabilities & owners' equity $ 305 60 25 45 100 $ 300 100 557 545 650 203 853 $1,410 600 225 825 $1,370 INCOME STATEMENT (2008) Revenue Cost of goods sold Gross margin Operating expenses Wage expense Depreciation expense Bad debt expense Bond interest expense Total operating expenses Net operating income Gain on sale of building Net income before tax Income taX Net income after tax $1,500 $171 40 15 14 6 0 141 $ 329

Additional information:

1. There were no write-offs of delinquent accounts during the year.
2. A building was sold during the year for $120.

P.S: Explain calculations too please!

Answer 1