Homework Answers
Current assets = 2.2
Current liabilities = 1
Current ratio = Current assets / Current liabilities
Current ratio is 2.2.
Working capital = Current assets - Current liabilities
Working capital = 2.2 - 1 = 1.2
Current assets = ($720,000 / 1.2) X 2.2 = $1,320,000
Current liabilities = ($720,000 / 1.2) X 1 = $600,000
After paying $125,000 short term liability, Current liability = $475,000 ($600,000 - $125,000)
Working capital = $1,320,000 - $475,000 = $845,000
Option c.
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A.
Required:
1. Please calculate the following ratios and amounts: a) working
capital, b)
current ratio, c) acid-test ratio, d) cash to current liabilities
ratio, e) days’ sales
in receivables (based on ending accounts receivables), f) days’
sales in
inventory (based on cost of goods and ending inventory), g)
operating cycle,
h) total debt to equity ratio and i) times interest earned. For
your calculations,
assume that a year amounts for 360 days
The balance sheet and the income statement...
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current ratio, and acid-test ratio.
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A.
Required:
1. Please calculate the following ratios and amounts: a) working
capital, b)
current ratio, c) acid-test ratio, d) cash to current liabilities
ratio, e) days’ sales
in receivables (based on ending accounts receivables), f) days’
sales in
inventory (based on cost of goods and ending inventory), g)
operating cycle,
h) total debt to equity ratio and i) times interest earned. For
your calculations,
assume that a year amounts for 360 days
The balance sheet and the income statement...
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