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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Definitions:

Neutral Retired Judge

A retired judge who serves impartially in alternative dispute resolution processes like mediation or arbitration.

Mini-Trial

A voluntary, private dispute resolution process involving a simplified trial aimed at facilitating settlement negotiations, typically with senior management who have settlement authority.

Long-Arm Jurisdiction

A legal term referring to the ability of local courts to exercise jurisdiction over individuals or entities that are not physically present within its geographical boundaries, but have connections to the area.

Defendant

A person, business, or entity being charged or prosecuted in a legal proceeding.