Financial Statements for Rarig Company Appear Below Required:
Calculate the Following for Year 2:
A)Current Ratio

question 149

Essay

Financial statements for Rarig Company appear below:

$\begin{array}{|l|r|}\hline&\begin{array}{r}\text { Rarig Company } \\\text { Income Statement } \\\text { For the Year Ended December 31, Year } \\\text { (dollars in thousands) }\end{array}\\\hline \text { Sales (All on Account) } & \$ 1800 \\\hline \text { Costs of Goods Sold } & \$ 1260 \\\hline \text { Gross Margin } & \$ 540 \\\hline \text { Operating Expenses } & \$ 210 \\\hline \text { Net Operating Income } & \$ 330 \\\hline \text { Interest Expense } & \$ 50 \\\hline \text { Net Income before Taxes } & \$ 280 \\\hline \text { Income Taxes (30\%) } & \$ 84 \\\hline \text { Net Income } & \$ 196\\\hline\end{array}$
Required:
Calculate the following for Year 2:
a)Current ratio.
b)Acid-test (quick)ratio.
c)Average collection period (age of receivables).
d)Inventory turnover.
e)Times interest earned.
f)Debt-to-equity ratio.

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