Limited Review of the Akins Income Statement shows 100,000 of Net Sales for the Year 2017 and NetIncome of 12,000. The terms for Sales and Purchases are 2/10, n/30. Partial Comparative BalanceSheets for the Akins Corporation appear below:(In Thousands)(In Thousands)20172016$ 3,000$15,0005,000CashMarketable Securities9,000Accounts Receivable25,00015,00023,00017,000InventoryEquipment (At Book Value)60,00055,000Land20,00015,000Patents50.00050,000Total Assets$190,000$172,000Current Liabilities10,00030,000Long Term LiabilitiesTotal Liabilities70.000100,00075,00085,000a) Compute the current ratio for 2017b) Compute the accounts receivable turnover ratio for 2017c) Compute the average days uncollected for 2017 and provide observation.

Ratio analysis can be defined as the technique that is used by the users of the financial statement…

Limited Review of the Akins Income Statement shows 100,000 of Net Sales for the Year 2017 and Net Income of 12,000. The terms for Sales and Purchases are 2/10, n/30. Partial Comparative Balance Sheets for the Akins Corporation appear below: (In Thousands) (In Thousands) 2016 $15,000 5,000 15,000 2017 Cash $ 3,000 Marketable Securities 9,000 Accounts Receivable Inventory Equipment (At Book Value) 25,000 23,000 17,000 60,000 55,000 Land 20,000 15,000 Patents 50.000 50.000 Total Assets $190,000 $172,000 10,000 75.000 85,000 Current Liabilities 30,000 70.000 Long Term Liabilities Total Liabilities 100,000 a) Compute the current ratio for 2017 b) Compute the accounts receivable turnover ratio for 2017 c) Compute the average days uncollected for 2017 and provide observation.

Limited Review of the Akins Income Statement shows 100,000 of Net Sales for the Year 2017 and Net Income of 12,000. The terms for Sales and Purchases are 2/10, n/30. Partial Comparative Balance Sheets for the Akins Corporation appear below: (In Thousands) (In Thousands) 2016 $15,000 5,000 15,000 2017 Cash $ 3,000 Marketable Securities 9,000 Accounts Receivable Inventory Equipment (At Book Value) 25,000 23,000 17,000 60,000 55,000 Land 20,000 15,000 Patents 50.000 50.000 Total Assets $190,000 $172,000 10,000 75.000 85,000 Current Liabilities 30,000 70.000 Long Term Liabilities Total Liabilities 100,000 a) Compute the current ratio for 2017 b) Compute the accounts receivable turnover ratio for 2017 c) Compute the average days uncollected for 2017 and provide observation.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.10E

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