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Current Year Preceding Year Balance Sheet Cash $10,000 $26,000 Short-term Investments 14,000 26,758 Accounts Receivable 40,000 55,000 Merchandise Inventory 40,000 39,000 Prepaid Expenses 15,000 10,000 Total Current Assets 150,000 202,000 Total Current Liabilities 132,000 95,000 Income Statement Net Credit Sales 477,000 Cost of Goods Sold 369,000
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
`/` =