Suppose Gamma Corp. belongs to the light airplane industry. Use the industry ben

Question

Suppose Gamma Corp. belongs to the light airplane industry. Use the industry benchmarks on the course slides Chapter 3 page17 and the firm's financial statements to answer the questions below.

a. Select at least one liquidity ratio and use it (them) to assess the firm's short term liquidity in 2013.

b. Calculate the firm's day's sale in inventory and interpret it.

c. Calculate the firm's total asset turnover and interpret it.

Gamma Corp. Income Statement

Please show me all the answer as step by step

Gamma Corp. Balance Sheet 2012 2013 2012 2013 Current Assets Current Liabilities      Cash $310,020 $367,904      Account Payable $300,000 $420,584      Account Receivable $408,000 $402,000      Notes Payable $543,000 $545,300      Inventory $100,000 $95,000           Total $843,000 $965,884           Total $818,020 $864,904 Long-term Debts $850,000 $920,000 Net Fixed Assets      Net plant and equipment $2,000,000 $2,150,000 Common Stock and Paid-in Surplus $843,000 $834,000           Total $2,000,000 $2,150,000 Retained earnings $282,020 $295,020 Total Assets $2,818,020 $3,014,904 Total Liabilities and Owners' Equity $2,818,020 $3,014,904

Explanation / Answer

Ratio Formula Value Interpretation Quick Ratio (Cash & Equivalents + Short term investments + Accounts Receivable)

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