Problem:
FINANCIAL STATEMENT ANALYSIS
RATIO ANALYSIS
The following is the Balance Sheet of Trea Trades Ltd:
|
BALANCE SHEET
|
Dec 31, 2014
|
Dec 31, 2013
|
|
Cash
|
$ 21,000
|
$ 18,000
|
|
Accounts receivable, net
|
31,000
|
35,000
|
|
Inventory
|
53,000
|
25,000
|
|
PP&E, net
|
120,000
|
90,000
|
|
Total assets
|
$225,000
|
$168,000
|
|
|
|
|
|
Accounts payable
|
$4,000
|
$ 6,000
|
|
Accrued liabilities
|
2,000
|
1,000
|
|
Long-term notes payable
|
84,000
|
90,000
|
|
Total liabilities
|
$ 90,000
|
$ 97,000
|
|
|
|
|
|
Common stock
|
$ 30,000
|
$ 2,000
|
|
Retained earnings
|
113,000
|
74,000
|
|
Treasury stock
|
(8,000)
|
(5,000)
|
|
Total stockholders' equity
|
$135,000
|
$71,000
|
|
Total liabilities and Stockholders' equity
|
$225,000
|
$168,000
|
Additional information:
• Net sales (all on account): $240,000
• Cost of goods sold: $110,000
Required:
Q1. Calculate the current ratio at year-end 2014.
Q2. Calculate the days in inventory ratio for 2014.
Q3. Calculate the inventory turnover for 2014.
Q4. Calculate the Accounts Receivable Turnover for 2014.