Reference no: EM131783836

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