Carla Vista Co. has these comparative balance sheet data: CARLA VISTA CO. Balance Sheets December 31 2020 2019 Cash $ 16,140 $ 32,280 Accounts receivable (net) 75,320 64,560 Inventory 64,560 53,800 Plant assets (net) 215,200 193,680 $371,220 $344,320 Accounts payable $ 53,800 $ 64,560 Mortgage payable (15%) 107,600 107,600 Common stock, $10 par 150,640 129,120 Retained earnings 59,180 43,040 $371,220 $344,320 Additional information for 2020: 1. Net income was $32,500. 2. Sales on account were $392,900. Sales returns and allowances amounted to $27,300. 3. Cost of goods sold was $217,300. 4. Net cash provided by operating activities was $57,200. 5. Capital expenditures were $30,000, and cash dividends were $19,000. Compute the following ratios at December 31, 2020. (Round current ratio and inventory turnover to 2 decimal places, e.g. 1.83 and all other answers to 1 decimal place, e.g. 1.8. Use 365 days for calculation.) (a) Current ratio. :1 (b) Accounts receivable turnover. times (c) Average collection period. days (d) Inventory turnover. times (e) Days in inventory. days (f) Free cash flow. $

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 16E

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Carla Vista Co. has these comparative balance sheet data:

CARLA VISTA CO. Balance Sheets December 31
	2020	2019
Cash	$ 16,140	$ 32,280
Accounts receivable (net)	75,320	64,560
Inventory	64,560	53,800
Plant assets (net)	215,200	193,680
	$371,220	$344,320
Accounts payable	$ 53,800	$ 64,560
Mortgage payable (15%)	107,600	107,600
Common stock, $10 par	150,640	129,120
Retained earnings	59,180	43,040
	$371,220	$344,320

Additional information for 2020:

1.		Net income was $32,500.
2.		Sales on account were $392,900. Sales returns and allowances amounted to $27,300.
3.		Cost of goods sold was $217,300.
4.		Net cash provided by operating activities was $57,200.
5.		Capital expenditures were $30,000, and cash dividends were $19,000.

Compute the following ratios at December 31, 2020. (Round current ratio and inventory turnover to 2 decimal places, e.g. 1.83 and all other answers to 1 decimal place, e.g. 1.8. Use 365 days for calculation.)

(a)	Current ratio.		:1
(b)	Accounts receivable turnover.		times
(c)	Average collection period.		days
(d)	Inventory turnover.		times
(e)	Days in inventory.		days
(f)	Free cash flow.	$

Expert Solution

Step 1

Financial ratios:

The ratio generated with the reference and use of numerical amounts or values taken out from financial records to gain meaningful appropriate information about a firm or company.

There are types of ratios to study the company's overall performance:

Liquidity ratios.
Leverage ratios.
Efficiency ratios.
Profitability ratios.
Market value ratios.

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