Question

the financial statements of victors natural foods include the following items

Compute the following ratios for the current year (Click the ioon to view the ratios.) The financial statements of Victor's Natural Foods include the following items: (Click the ioon to view the financial statements.) a. Compute the current ratio for the current year. (Abbreviations used: STI Short-term investments Round your answer to two decimal places, X.XX) Current ratio b. Compute the cash ratio for the current year. (Round your answer to two decimal places, XXX.) Cash ratio c. Compute the acid-test ratio for the current year. (Round your answer to two decimal places, XXX) Acid-test ratio d. Compute the inventory turnover for the current year. (Round your answer to two decimal places, XXX) times Inventory tumover e. Compute the days' salos in inventory for the current year. (Round intermediary calculations to two deaimal places, X XX and round your final answer to the nearest whole day)

Answer 1

a.
Current ratio	Current assets/Current liabilities
Current ratio	171000/139000
Current ratio	1.23
b.
Cash ratio	Cash and cash equivalents/Current liabilities
Cash ratio	16000/139000
Cash ratio	0.12
c.
Acid test ratio	(Current assets - Merchandise inventory - Prepaid expenses)/Current liabilities
Acid test ratio	(171000-68000-18000)/139000
Acid test ratio	0.61
d.
Inventory turnover	Cost of goods sold/Average inventory
Inventory turnover	316000/((68000+64000)/2)
Inventory turnover	316000/66000
Inventory turnover	4.79
e.
Day's sales in inventory	365/Inventory turnover
Day's sales in inventory	365/4.79
Day's sales in inventory	76.23	days
f.
Day's sales in receivables	(Average receivables/Sales)*365
Day's sales in receivables	((60000+74000)/2)/464000)*365
Day's sales in receivables	(67000/464000)*365
Day's sales in receivables	52.70	days
g.
Gross profit percentage	Gross profit/Net credit sales
Gross profit percentage	(464000-316000)/464000
Gross profit percentage	148000/464000
Gross profit percentage	31.90%