ent ratio (g) Working capital (h) Receivables turnover and average collection period (Net receivables on January 1, (i) Merchandise inventory turnover and average number of days to sell inventory 20-1, were $39,800.) (Merchandise inventory on January 1, 20-1, was $48,970.) (j) Debt-to-equity ratio (k) Asset turnover (Assets on January 1, 20-1, were $175s50.) (1) Times interest earned ratio (m) Profit margin ratio (n) Assets-to-equity ratio (o) Price-earnings ratio (The market price of the common stock was $100.00 and $85.00 on December 31, 20-2 and 20-1, respectively.) 00 000A SERIES B EXERCISES 0000 E 24-1B (LO2) / (b) 3.87 to 1 ANALYSIS OF LIQUIDITY Based on the comparative income statement and balance sheet for Falcon Designers, Inc., given on the next page, compute ity measures for 20-2 (round all calculations to two decimal places): the following liquid- (a) Quick or acid-test ratio (b) Current ratio 18ATHORT O 22YJAMA bovon -05 1o1 2onuenom (c) Working capital cise 24-1B, compute the following activity measures for 20-2 (round all calculations to two decimal places): ANALYSIS OF ACTIVITY MEASURES Based on the financial statement data in Exer- E 24-2B (LO3) (b) 1.81 or 201.66 days (b) Merchandise inventory turnover and average number of days to sell inventory (continued) (a) Accounts receivable turnover and average collection period (c) Asset turnover E 24-4E / (b) 28.5 Accounting for Corporations and Manufacturing Businesses PARTS For Years Ended December 31, 20-2 and 20-1 $1,850,800 Falcon Designers, Inc. 20-1 Comparative Income Statement 20-2 $ 1,532,600 1,010,500 1,150,400 $ 522,100 $ 700,400 156,600 Net sales (all on account) E 24 180,300 Cost of goods sold Gross profit 18,200 18,200 ass 107,600 160,600 Operating expenses $ 239,700 Other expenses (interest) $ 341,300 Income tax expense E Net income Falcon Designers, Inc. Comparative Balance Sheet December 31, 20-2 and 20-1 20-2 20-1 $ 95,500 $ 79,700 Cash 200,000 200,000 Government notes Accounts receivable (net) 639,300 570,600 Merchandise inventory 634,900 639,500 Supplies and prepayments 39,600 29,900 Land 81,900 78,400 Building (net) 227,500 Office equipment (net) 289,300 Total assets 10,400 10,800 Current liabilities (accounts payable) $1,929,100 $1,898,200 Bonds payable $ 416,000 $ 394,500 Total liabilities 150,000 Common stock ($10 par, 125,000 shares) $ 566,000 150,000 Retained earnings $ 544,500 Total stockholders' equity $1,250,000 $1,250,000 Total liabilities and stockholders' equity 113,100 103,700 $1,363,100 B (LO4) $1,929,100 $1,353,700 40% ANALYSIS OF PROFITO $1,898,200