Consider the following financial statement information for Hi-Tech Instruments: 2020 (Thousands of Dollars, except Earnings per Share) Sales revenue $210,000 Cost of goods sold 125,000 Net income 8,300 Dividends 2,600 Earnings per share 4.15 HI-TECH INSTRUMENTS, INC. Balance Sheets (Thousands of Dollars) Dec. 31, 2020 Dec. 31, 2019 Assets Cash $18,300 $18,000 Accounts receivable (net) 46,000 41,000 Inventory 39,500 43,700 Total Current Assets 103,800 102,700 Plant assets (net) 52,600 50,500 Other assets 15,600 13,800 Total Assets $172,000 $167,000 Liabilities and Stockholders’ Equity Notes payable—banks $6,000 $6,000 Accounts payable 22,500 18,700 Accrued liabilities 16,500 21,000 Total Current Liabilities 45,000 45,700 9% Bonds payable 40,000 40,000 Total Liabilities 85,000 85,700 Common stock* 50,000 50,000 Retained earnings 37,000 31,300 Total Stockholders’ Equity 87,000 81,300 Total Liabilities and Stockholders’ Equity $172,000 $167,000 *Common stock: $25 par value, 2,000,000 shares outstanding. Industry Average Ratios for Competitors Quick ratio 1.3 Current ratio 2.4 Accounts receivable turnover 5.9 times Inventory turnover 3.5 times Debt-to-equity ratio 0.73 Gross profit percentage 42.8 percent Profit margin 4.5 percent Return on assets 7.6 percent

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 103.1C: Leverage Cook Corporation issued financial statements at December 31, 2019, that include the...

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Consider the following financial statement information for Hi-Tech Instruments:

2020 (Thousands of Dollars, except Earnings per Share)
Sales revenue	$210,000
Cost of goods sold	125,000
Net income	8,300
Dividends	2,600
Earnings per share	4.15

HI-TECH INSTRUMENTS, INC.
Balance Sheets
(Thousands of Dollars)	Dec. 31, 2020	Dec. 31, 2019
Assets
Cash	$18,300	$18,000
Accounts receivable (net)	46,000	41,000
Inventory	39,500	43,700
Total Current Assets	103,800	102,700
Plant assets (net)	52,600	50,500
Other assets	15,600	13,800
Total Assets	$172,000	$167,000
Liabilities and Stockholders’ Equity
Notes payable—banks	$6,000	$6,000
Accounts payable	22,500	18,700
Accrued liabilities	16,500	21,000
Total Current Liabilities	45,000	45,700
9% Bonds payable	40,000	40,000
Total Liabilities	85,000	85,700
Common stock*	50,000	50,000
Retained earnings	37,000	31,300
Total Stockholders’ Equity	87,000	81,300
Total Liabilities and Stockholders’ Equity	$172,000	$167,000

*Common stock: $25 par value, 2,000,000 shares outstanding.

Industry Average Ratios for Competitors
Quick ratio	1.3
Current ratio	2.4
Accounts receivable turnover	5.9 times
Inventory turnover	3.5 times
Debt-to-equity ratio	0.73
Gross profit percentage	42.8 percent
Profit margin	4.5 percent
Return on assets	7.6 percent

Calculate the company’s inventory turnover for 2020.
Round answer to two decimal places (ex: 2.97543 = 2.98).
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