Question

I have attached four pictures, for the one problem.

1. Use ratios to analyze a company's liquidity and solvency. ? X Calculate Select Ratios - Excel FORMULAS DATA REVIEW - Sign In FILE HOME INSERT PAGE LAYOUT VIEW Calibri |11 A A = % D E A E- Paste B I U . " A Alignment Number Conditional Format as Cell Formatting Table Styles Styles Cells - Editing Clipboard Font A1 X fic Condensed financial statements for Games Galore are summarized below: BC 1 Condensed financial statements for Games Galore are summarized below: $ 3 Balance Sheet 4 Cash 5 Accounts Receivable, Net 6 Inventory 7 Prepaid Insurance 8 Total Current Assets 9 Property and Equipment, Net 10 Total Assets 2016 185,000 80,000 104,000 11,900 380,900 514,500 895,400 2015 143,000 59,000 134,000 5,880 341,880 407,000 748,880 $ $ $ 12 Current Liabilities 13 Long-term Liabilities 85,300 $ 284,000 96,800 224,000

Answer 1

Current ratio= Current assets/ current liability
	380900 / 85300      =	4.5	to 1
Receivables turnover ratio= credit sales/ Average receivables
	3031000/((80000+59000)/2)=	43.61	times
Days to collect= 365/ Receiables turnover ratio
	365/ 43.61        =	8	days
Inventory Turnover ratio= cost of goods sold/ Average inventory
	1949000/( (104000+134000)/2)=	16.38	times
Day's sales in inventory = 365/ inventory turnover ratio
	365/ 16.38	22	days
Debts to assets= total debt/ total assets
	284000 / 895400	0.32	to 1
Times interest earned= Earnings before interest and taxes/ Interest expense
	190600 / 14500	13.1	times