Problem I. The following data represent selected information from the comparative income statement and balance sheet for Little CPA Company for the years ended December 31, 2020 and 2019: 20202019Net Sales (all on credit)P370,000P333,000Cost of goods sold160,000150,000Gross profit210,000183,000Income from operations95,00087,000Interest expense8,0008,000Net income70,00057,000Cash10,00014,000Accounts receivable, net30,00025,000Inventory43,00040,000Prepaid expenses5,0007,000Total current assets88,00086,000Total noncurrent assets112,000104,000Total current liabilities70,00060,000Total noncurrent liabilities40,00045,000Ordinary share capital, no par*60,00060,000Retained earnings30,00025,000 Note: 10,000 ordinary shares have been issued and outstanding since the company was established. They had a market value of P90 per share at 12/31/20, and they were selling for P91.50 per share at 12/31/19.What is the inventory turnover, accounts recievable turnover, days sales in recievables, times-interest-earned ratio, rate of return on net sales and return on nets sales for the year ended 12/31/20 ?

SOLUTION- RATIO ANALYSIS- IT IS THE PROCESS EXAMINING AND COMPARING INFORMATION BY CALCULATING…

Answered: The following data represent selected…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 57BE

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Problem I. The following data represent selected information from the comparative income statement and balance sheet for Little CPA Company for the years ended December 31, 2020 and 2019:

	2020	2019
Net Sales (all on credit)	P370,000	P333,000
Cost of goods sold	160,000	150,000
Gross profit	210,000	183,000
Income from operations	95,000	87,000
Interest expense	8,000	8,000
Net income	70,000	57,000
Cash	10,000	14,000
Accounts receivable, net	30,000	25,000
Inventory	43,000	40,000
Prepaid expenses	5,000	7,000
Total current assets	88,000	86,000
Total noncurrent assets	112,000	104,000
Total current liabilities	70,000	60,000
Total noncurrent liabilities	40,000	45,000
Ordinary share capital, no par*	60,000	60,000
Retained earnings	30,000	25,000

Note: 10,000 ordinary shares have been issued and outstanding since the company was established. They had a market value of P90 per share at 12/31/20, and they were selling for P91.50 per share at 12/31/19.

What is the inventory turnover, accounts recievable turnover, days sales in recievables, times-interest-earned ratio, rate of return on net sales and return on nets sales for the year ended 12/31/20 ?

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