Calculate the risk ratios

Assignment Help Financial Accounting

Reference no: EM1393910

The following income statement and balance sheet for Virtual Gaming Systems are provided.

VIRTUAL GAMING SYSTEMS Income Statement For the year ended December 31, 2012
Sales revenue		$3,036,000
Cost of goods sold		1,950,000

Gross profit		1,086,000
Expenses
Operating expenses	858,000
Depreciation expense	27,000
Loss on sale of land	8,000
Interest expense	15,000
Income tax expense	48,000

Total expenses		956,000

Net income		$ 130,000

VIRTUAL GAMING SYSTEMS Balance Sheet December 31
	2012	2011
Assets
Current assets:
Cash	$186,000	$144,000
Accounts receivable	81,000	60,000
Inventory	105,000	135,000
Prepaid rent	12,000	6,000
Long-term assets:
Investment in bonds	105,000	0
Land	210,000	240,000
Equipment	270,000	210,000
Less: Accumulated depreciation	(69,000)	(42,000)

Total assets	$900,000	$753,000

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 66,000	$ 81,000
Interest payable	6,000	3,000
Income tax payable	15,000	14,000
Long-term liabilities:
Notes payable	285,000	225,000
Stockholders' equity:
Common stock	300,000	300,000
Retained earnings	228,000	130,000

Total liabilities and stockholders' equity	$900,000	$753,000

Required:

Assuming that all sales were on account, calculate the following risk ratios for 2012. (Round your intermediate and final answers to 1 decimal place. Omit the "%" sign in your response)

Risk Ratios
1. Receivables turnover ratio		times
2. Average collection period		days
3. Inventory turnover ratio		times
4. Average days in inventory		days
5. Current ratio		to 1
6. Acid-test ratio		to 1
7. Debt to equity ratio		%
8. Times interest earned ratio		times

Reference no: EM1393910

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