Question

This Question: 4 pts 38 of 60 (42 complete) This Test: 120 pts possible The financial statements of Silver Corporation include the following items: 囲(Click the icon to view the data.) Compute the following ratios for the current year (Click the loon to view the ratios.) 7. Compute the current ratio for the current year Begin by selecting the formula labels, then enter the amounts and compute the current ratio for the current year. (Round your answer to two decimal places, X.XX.) Current ratio 8. Compute the acid-test ratio for the current year. Select the formula labels, enter the amounts and compute the acid-test ratio for the current year. (Abbreviations used: Net AR Net Accounts Receivables Merchandise Inv. Merchandise Inventory, ST investments Short-term Investments. Round your answer to two decimal places, X.XX.) Acid-test a ratio ) 1

Answer 1

Answer to Part 7.

Current Ratio = Current Assets / Current Liabilities
Current Ratio = 72,900 / 54,900
Current Ratio = 1.33 : 1

Answer to Part 8.

Acid Test Ratio = (Cash + Short Term Investments + Net Accounts Receivable) / Current Liabilities
Acid Test Ratio = (8,000 + 5,200 + 21,300) / 54,900
Acid Test Ratio = 34,500 / 54,900
Acid Test Ratio = 0.63 : 1

Answer to Part 9.

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Average Inventory = (31,300 + 25,600) / 2
Average Inventory = $28,450

Inventory Turnover Ratio = 121,100 / 28,450
Inventory Turnover Ratio = 4.26 times

Answer to Part 10.

Gross Profit Percentage = Gross Profit / Net Sales * 100
Gross Profit = Net Sales – Cost of Goods Sold
Gross Profit = $188,900 - $121,100
Gross Profit = $67,800

Gross Profit Percentage = 67,800 / 188,900 * 100
Gross Profit Percentage = 35.89%