Financial statements for rardin company appear below

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Reference no: EM13484172 , Length: 30

Financial statements for Rardin Company appear below:

Rardin Company

Statement of Financial Position

December 31, Year 2 and Year 1

(dollars in thousands)

	Year 2	Year 1
Current assets:
Cash and marketable securities	$ 160	$ 160
Accounts receivable, net	180	160
Inventory	160	180
Prepaid expenses	80	70
Total current assets	580	570
Noncurrent assets:
Plant & equipment, net	1,180	1,110
Total assets	$1,760	$1,680
Current liabilities:
Accounts payable	$ 130	$ 140
Accrued liabilities	40	60
Notes payable, short term	290	280
Total current liabilities	460	480
Noncurrent liabilities:
Bonds payable	260	300
Total liabilities	720	780
Stockholders' equity:
Preferred stock, $5 par, 10%	100	100
Common stock, $5 par	160	160
Additional paid-in capital--common stock	150	150
Retained earnings	630	490
Total stockholders' equity	1,040	900
Total liabilities & stockholders' equity	$1,760	$1,680

Rardin Company

Income Statement

For the Year Ended December 31, Year 2

(dollars in thousands)

Sales (all on account)	$1,900
Cost of goods sold	1,330
Gross margin	570
Operating expenses	220
Net operating income	350
Interest expense	30
Net income before taxes	320
Income taxes (30%)	96
Net income	$ 224

Required:

Compute the following for Year 2:

a. Current ratio.

b. Acid-test (quick) ratio.

c. Average collection period (age of receivables).

d. Inventory turnover.

e. Times interest earned.

f. Debt-to-equity ratio.

Reference no: EM13484172

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