60.1K

Verified Solution

Link Copied!

Income statement and balance sheet data for Great Adventures, Inc., are provided below.

GREAT ADVENTURES, INC.
Income Statement
For the year ended December 31, 2022
Net sales revenues				$	170,420
Interest revenue					180
Expenses:
Cost of goods sold	$	38,800
Operating expenses		55,060
Depreciation expense		17,550
Interest expense		7,533
Income tax expense		14,800
Total expenses					133,743
Net income				$	36,857

GREAT ADVENTURES, INC.
Balance Sheets
December 31, 2022 and 2021
	2022				2021
Assets
Current assets:
Cash	$	206,206			$	64,560
Accounts receivable		48,140				0
Inventory		7,600				0
Other current assets		960				4,740
Long-term assets:
Land		560,000				0
Buildings		815,000				0
Equipment		68,180				43,000
Accumulated depreciation		(25,850)	)			(8,150)	)
Total assets	$	1,680,236			$	104,150
Liabilities and Stockholders Equity
Current liabilities:
Accounts payable	$	21,400			$	2,920
Interest payable		900				780
Income tax payable		14,800				14,060
Other current liabilities		22,800				0
Notes payable (current)		54,075				0
Notes payable (long-term)		531,174				30,600
Stockholders equity:
Common stock		126,000				22,040
Paid-in capital		958,600				0
Retained earnings		58,487				33,750
Treasury stock		(108,000)	)			0
Total liabilities and stockholders equity	$	1,680,236			$	104,150

As you can tell from the financial statements, 2022 was an especially busy year. Tony and Suzie were able to use the money received from borrowing and the issuance of stock to buy land and begin construction of cabins, dining facilities, ropes course, and the outdoor swimming pool. They even put in a baby pool to celebrate the birth of their first child.

Required:

1. Calculate the following risk ratios for 2022. (Use 365 days in a year. Round your intermediate calculations and final answers to 1 decimal place.)

Receivables turn over ratio (hint: use net sales revenue for net credit sales): ___ times

Average collection period: ____ days

Inventory turnover ratio: _____ times

Average days in Inventory: ______ days

Current ratio: _____ to 1

Acid test ratio (Hint: there's no current investments): _____ to 1

Debit to equity ratio: _____ %

Time interest earned ration: ______ times

2. Calculate the following profitability ratios for 2022. (Use 365 days in a year. Round your intermediate calculations and final answers to 1 decimal place.)

Gross profit ratio (Hint: use net sales revenue): ____%

Return on assets: _____ %

Profit Margin (Hint: use net sales revenues): _____ %

Asset turnover (Hint: use net sales revenue): _____ times

Return on equity: _____ %

Answer & Explanation Solved by verified expert

See Answer