Homework Answers
| (a) | Current ratio:- | |||||
| a. | Current Assets | |||||
| Cash+Accounts Receivable+Inventory | 50000+280000+240000 | $ 570,000 | ||||
| b. | Current Liabilities | |||||
| Accounts Payable+ Accrued Taxes | 220000+80000 | $ 300,000 | ||||
| Ratio (a/b) | 1.90 | times | ||||
| (b) | Quick Ratio:- | |||||
| a. | Quick Assets (Cash+Accounts Receivable) | 50000+280000 | $ 330,000 | |||
| b. | Current Liabilities | $ 300,000 | ||||
| Ratio (a/b) | 1.10 | times | ||||
| (c) | Debt to total assets ratio:- | |||||
| a. | Total Liabilities | 220000+80000+118000 | $ 418,000 | |||
| b | Total Assets | $ 950,000 | ||||
| Ratio (a/b) | 2.27 | times | ||||
| (d) | Assets Turnover:- | |||||
| a. | Net Sales | $ 3,040,000 | ||||
| b. | Total assets | $ 950,000 | ||||
| Ratio (a/b) | 3.20 | times | ||||
| (e) | Average collection period:- | |||||
| a. | Net Credit Sales | 3040000*75% | $ 2,280,000 | |||
| b. | Accounts Receivable | $ 280,000 | ||||
| c | Number of Days in year | 365 | ||||
| Ratio ((b/a) *c) | 44.82 | days | ||||
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