Question

Using the balance sheets and income statements calculate the following ratios for both Carson and​ BGT found below:

Balance Sheet ($000)	Carson Electronics, Inc.	BGT Electronics, Inc.
Cash	$1,970	$1,450
Accounts receivable	4450	5990
Inventories	1540	2470
Current assets	$7,960	$9,910
Net fixed assets	16000	24980
Total assets	$23,960	$34,890
Accounts payable	$2,500	$5,050
Accrued expenses	980	1470
Short-term notes payable	3520	1520
Current liabilities	$7,000	$8,040
Long-term debt	8030	4020
Owners' equity	8930	22830
Total liabilities and owners' equity	$23,960	$34,890

Income Statement ($000)	Carson Electronics, Inc.	BGT Electronics, Inc.
Net sales (all credit)	$47,980	$70,020
Cost of goods sold	(35,990)	(42,050)
Gross profit	$11,990	$27,970
Operating expenses	(7,980)	(11,960)
Net operating income	$4,010	$16,010
Interest expense	(1,110)	(540)
Earnings before taxes	$2,900	$15,470
Income taxes (35%)	(1,015)	(5,415)
Net income	$1,885	$10,055

Carson's operating return on assets is ___%. (Round to one decimal place.)

BGT's operating return on assets is ___%. (Round to one decimal place.)

Carson's debt ratio is ___%. (Round to two decimal place.)

BGT's debt ratio is __ %. (Round to two decimal place.)

Carson's average collection period is ___days. (Round to one decimal place.)

BGT's average collection period is ___ days. (Round to one decimal place.)

Carson's fixed asset turnover is ___. (Round to two decimal places.)

BGT's fixed asset turnover is ___. (Round to two decimal places.)

Carson's return on equity is ___%. (Round to one decimal place.)

BGT's return on equity is ___%. (Round to two decimal place.)

Answer 1

Balance Sheet ($000)	Carson Electronics, Inc.	BGT Electronics, Inc.		Income Statement ($000)	Carson Electronics, Inc.	BGT Electronics, Inc.
Cash	$1,970	$1,450		Net sales (all credit)	$47,980	$70,020
Accounts receivable	4450	5990		Cost of goods sold	-35,990	-42,050
Inventories	1540	2470		Gross profit	$11,990	$27,970
Current assets	$7,960	$9,910		Operating expenses	-7,980	-11,960
Net fixed assets	16000	24980		Net operating income	$4,010	$16,010
Total assets	$23,960	$34,890		Interest expense	-1,110	-540
				Earnings before taxes	$2,900	$15,470
Accounts payable	$2,500	$5,050		Income taxes (35%)	-1,015	-5,415
Accrued expenses	980	1470		Net income	$1,885	$10,055
Short-term notes payable	3520	1520
Current liabilities	$7,000	$8,040
Long-term debt	8030	4020
Owners' equity	8930	22830
Total liabilities and owners' equity	$23,960	$34,890

Given above are the case facts. I have answered all the questions below along with the required formulaes:

Carson's operating return on assets is	Net Operating Income/Total Assets	17%
BGT's operating return on assets is	Net Operating Income/Total Assets	46%
Carson's debt ratio is	Total Debt/Total Equity	1.29
BGT's debt ratio is	Total Debt/Total Equity	0.24
Carson's average collection period is	Days Sales Outstanding-->365/(Total Credit sales/account receivables)	33.9
BGT's average collection period is	Days Sales Outstanding-->365/(Total Credit sales/account receivables)	31.2
Carson's fixed asset turnover is	Net Sales/Total Fixed Assets	2.00
BGT's fixed asset turnover is	Net Sales/Total Fixed Assets	2.01
Carson's return on equity is	Net Income/Total Equity	0.2
BGT's return on equity is	Net Income/Total Equity	0.4

Please reach out for any further clarifications