4. Quick ratio is :
(Current assets - inventory) / current liabilities = 1.4
Current ratio :
Current assets/ Current liabilities = 3,
So, Current assets = 3* current liabilities,
since current assets = $810,000
Current liabilities = $2,70,000,
since, current assets = 3*current liabilities
3CL - Inventory = 1.4CL
3CL - 1.4CL = INVENTORY
1.6 * 2,70,000 = INVENTORY
4,32,000 = INVENTORY,
INVENTORY TURNOVER ,
COGS/ AVERAGE INVENTORY = 6,
Therefore, COGS = $2,592,000
The correct option is option A.
4. The Winston Washers Company had a quick ratio of 1.40, a current ratio of 3.00,...
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XYZ Company Debt 725 Total Assets 1365 Inventory 375 Current Assets 900 Current Liabilities 500 Total Equity 1500 Cost of Goods Sold 1150 Sales 1200 Operating Profit 330 Taxes 150 Use the above chart to calculate the following Quick Ratio – (5pts) Current Ratio – (5pts) Inventory Turnover – (5pts) Debt Ratio – (5pts) Total Asset Turnover – (5pts)
Instructions For 2017 and 2018, calculate current ratio, quick (acid-test) ratio, inventory turnover and days' inventory outstanding (DIO), accounts receivable turnover, days' sales in average receivables or days' sales outstanding (DSO), accounts payable turnover, days' payable outstanding (DPO), and cash conversion cycle (in days). a. Use the cost of goods sold in the formula for accounts payable turnover. b. Use a 365-day year for calculations as needed. c. Use cell references from prior calculations, if applicable. (Always use cell references...
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