The financial statements for Castile Products, Inc., are given below:
Castile Products, Inc.
Balance Sheet
December 31 |
| Assets |
|
|
|
| Current assets: |
|
|
|
| Cash |
$ |
6,500 |
|
| Accounts receivable, net |
|
35,000 |
|
| Merchandise inventory |
|
70,000 |
|
| Prepaid expenses |
|
3,500 |
|
| |
| Total current assets |
|
115,000 |
|
| Property and equipment, net |
|
185,000 |
|
| |
| Total assets |
$ |
300,000 |
|
| |
| Liabilities and Stockholders' Equity |
|
|
|
| Liabilities: |
|
|
|
| Current liabilities |
$ |
50,000 |
|
| Bonds payable, 10% |
|
80,000 |
|
| |
| Total liabilities |
|
130,000 |
|
| Stockholders' equity: |
|
|
|
| Common stock, $5 par value |
$ |
30,000 |
|
| Retained earnings |
|
140,000 |
|
| |
| Total stockholders' equity |
|
170,000 |
|
| |
| Total liabilities and equity |
$ |
300,000 |
|
| |
Account balances at the beginning of the year were: accounts receivable, $25,000; and inventory, $60,000. All sales were on account.
Castile Products, Inc.
Income Statement
For the Year Ended December 31 |
| Sales |
$ |
420,000 |
|
| Cost of goods sold |
|
292,500 |
|
| |
| Gross margin |
|
127,500 |
|
| Selling and administrative expenses |
|
89,500 |
|
| |
| Net operating income |
|
38,000 |
|
| Interest expense |
|
8,000 |
|
| |
| Net income before taxes |
|
30,000 |
|
| Income taxes (30%) |
|
9,000 |
|
| |
| Net income |
$ |
21,000 |
|
| |
Required: Compute the following financial data and ratios:
1. working capital
2. current ratio
3. acid-test ratio
4. debt-to-equity ratio
5. times interest earned ratio
6. average collection period
7. average sale period
8. operating cycle