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Current Year Preceding Year Balance Sheet Cash $30,000 $22,000 Short-term Investments 17,000 27,669 Accounts Receivable 20,000 58,000 Merchandise Inventory 40,000 37,000 Prepaid Expenses 11,000 50,000 Total Current Assets 150,000 202,000 Total Current Liabilities 128,000 91,000 Income Statement Net Credit Sales 479,000 Cost of Goods Sold 366,000
Compute the following ratios for the current year:
a) Working Capital
Total Current Assets `-` Total Current Liabilities
`-` =
b) Current Ratio
Total current assets `/` Total Current Liabilities
`/` =
c) Acid-test Ratio
Cash + Short Term Investment + Net Acct. Receivables `/` Total Current Liabilities
`/` =
d) Inventory Turnover
Cost of goods sold `/` Average merchandise inventory
`/` =
e) Days sales in inventory
365 days `/` Inventory turnover
`/` =
f) Accounts Receivable turnover ratio
Net credit sales `/` Average net accounts receivables
`/` =
g) Days sales in receivables
365 days `/` Accounts receivable turnover ratio
`/` =
h) Gross Profit Percentage
Gross profit `/` Net sales revenue
`/` =