The Following Condensed Income Statement Is for Mason Inc Compute the Following Ratios for 2017,and Provide a Brief Explanation

Essay

The following condensed income statement is for Mason Inc.
$\begin{array}{c} \text { Mason Inc. }\\ \text { Income Statement}\\ \text { Years ended December 31, 2017 and 2016}\\ \text { (in thousands)}\\\begin{array}{lcc}&2017&2016\\ \text { Net sales ( } 80 \% \text { are credit sales) } & \$ 60,000 & \$ 46,000 \\ \text { Cost of goods sold } & 26,000 & 20,000 \\ \text { Gross margin } & 34,000 & 26,000 \\ \text { Selling and administrative expenses } & 6,000 & 4,000 \\ \text { Operating income } & 28,000 & 22,000 \\\text { Interest expense } & 1,000 & 1,000 \\\text { Income before taxes } & 27,000 & 21,000 \\ \text { Income tax expense } & 2,000 & 1,000 \\ \text { Net income } & \$ 25,000 &\$ 20,000 \\\end{array}\end{array}$

Compute the following ratios for 2017,and provide a brief explanation after each ratio (round computations to two decimal places):
(1)Current ratio
(2)Quick ratio
(3)Receivables turnover ratio
(4)Average collection period
(5)Inventory turnover ratio
(6)Average sale period