Smith Company Balance Sheet and selected Income Statement data

                                                         Table 1

Smith Company Balance Sheet and selected Income Statement data

Assets:

Cash and marketable securities                                                  $300,000

Accounts receivable                                                                       2,215,000

Inventories                                                                                        1,837,500

Prepaid expenses                                                                                 24,000

Total current assets                                                                      $3,286,500

Fixed assets                                                                                      2,700,000

Less: accumulated depreciation                                                1,087,500

Net fixed assets                                                                             $1,612,500

Total assets                                                                                     $4,899,000

Liabilities:

Accounts payable                                                                            $240,000

Notes payable                                                                                     825,000

Accrued taxes                                                                                        42,500

Total current liabilities                                                               $1,107,000

Long-term debt                                                                                   975,000

Owner's equity                                                                                2,817,000

Total liabilities and owner's equity                                        $4,899,000

Net sales (all credit)                                                                     $6,375,000

Less: Cost of goods sold                                                                4,312,500

Selling and administrative expense                                         1,387,500

Depreciation expense                                                                       135,000

Interest expense                                                                                  127,000

Earnings before taxes                                                                     $412,500

Income taxes                                                                                        225,000

Net income                                                                                        $187,500

Common stock dividends                                                               $97,500

Change in retained earnings                                                          $90,000

Based on the information in Table 1, the current ratio is

A) 2.97.

B) 1.46.

C) 2.11.

D) 2.23.

Based on the information in Table 1, the average collection period is

A) 71 days.

B) 84 days.

C) 64 days.

D) 127 days.

Based on the information in Table 1, the debt ratio is

A) 0.70.

B) 0.20.

C) 0.74.

D) 0.42.

Based on the information in Table 1, the net profit margin is

A) 4.61%.

B) 2.94%.

C) 1.97%.

D) 5.33%.

Based on the information in Table 1, the inventory turnover ratio is

A) 0.29 times.

B) 2.35 times.

C) 0.43 times.

D) 3.47 times.