You are evaluating the balance sheet for PattyCake\'s Corporation. From the bala
ID: 2637403 • Letter: Y
Question
You are evaluating the balance sheet for PattyCake's Corporation. From the balance sheet you find the following balances: cash and marketable securities = $300,000; accounts receivable $1,220,000, inventory = $2,120,000; accrued wages and taxes = $510,000, accounts payable $810,000, and notes payable = $620,000. Calculate PattyCakes' current ratio. (Round your answer to 2 decimal places.) Current ratio times Calculate PattyCakes' quick ratio. (Round your answer to 2 decimal places.) culate PattyCakes quick rato. (Round your answer to 2 decimal places) times Quick ratico Calculate PattyCakes' cash ratio. (Round your answer to 2 decimal places.) Cash ratio times
Explanation / Answer
Answer:-
current assets = cash & marketable secuties ($ 390,000) + account receivable (1,220,000) + inventory ($ 2,120,000)
= $ 3,730,000
current liabilities = Account payable ( $ 810,000) + notes payable ($ 620,000) = $ 1,430,000
Current ratio = 3,730,000 / 1,430,000 = 2.60 : 1
= 1,610,000 / 1,430,000 = 1.125 : 1
= 390,000 / 1,430,000 = 0.272 :1
inventory turnover ratio = net sales / inventory = 26 million / 5.9 million = 4.40 times
inventory collection days = 365 days / 4.40 = 82.95 Days
inventory turnover per year = 4.4 times
Answer: 3
debt to equity ratio = 1.78 times
total debt = 28 million
calculate total equity ?
debt to equity ratio = total debt / total equity
1.78 = 28 million / total equity
total equity = 15.73 million
Answer: 4
return on total assets = net income / total assets
8.51 % = net income / 9 million
net income = 7.659 million
Return on equity = annual net income / share holder's equity
14% = 7.659 million / shareholdder's equity
share holder's equity = 54.70 million
profit margin ratio = net income / net sales
11.5% = 7.659 million / net sales
net sales = $ 66.6 million
Answer:- 5
Return on equity = net income / equity = 18.43 %
equity multiplier = total assets / total equity = 1.60
profit margin = net income / sales = 18 %
Total assets turnover ratio = net sales / average total assets
= equity / assets * net income / equity * assets/ net income
= 1/ 1.60 * 18.43% * 1/18% = 0.639 times
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