ZuoTi.Pro
Question

Liquidity and Asset Management Ratios Oasis Products, Inc. has current liabilities = $9.8 million, current ratio = 2.00...

Liquidity and Asset Management Ratios Oasis Products, Inc. has current liabilities = $9.8 million, current ratio = 2.00 times, inventory turnover ratio = 12.5 times, average collection period = 25 days, and sales = $111 million. What is the value of their cash and marketable securities? (Consider a 365 days a year.)

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Current ratio = current assets / current liabilities = 2 times

Current assets = 2 * $9,800,000 = $19,600,000

Inventory turnover = Credit sales /inventory = 12.5 times

Inventory = $111,000,000 / 12.5 = $8,880,000

Inventory = $8,880,000

Average collection period = 25 days = accounts receivable * 365 / $111,000,000

Accounts receivable = $7,602,740

Cash and marketable securities = Current assets - Inventory - Accounts receivable

Cash and marketable securities = $19,600,000 - $8,880,000 - $7,602,740

Cash and marketable securities = $3,117,260

0 0
Add a comment
Know the answer?
Add Answer to:
Liquidity and Asset Management Ratios Oasis Products, Inc. has current liabilities = $9.8 million, current ratio = 2.00...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Problem 3-16 Liquidity and Asset Management Ratios (LG 3-1, LG 3-2) Mandesa, Inc. has current liabilities...

    Problem 3-16 Liquidity and Asset Management Ratios (LG 3-1, LG 3-2) Mandesa, Inc. has current liabilities of $9,200,000, current ratio of 2.0 times, inventory turnover of 12 times, average collection period of 42 days, and credit sales of $65,200,000. Calculate the value of cash and marketable securities. (Use 365 days a year. Do not round your intermediate calculations. Round your final answer to the nearest dollar amount.) Cash and marketable securities

  • Mandesa, Inc. has current liabilities of $9,400,000, current ratio of 1.8 times, inventory turnover of 10...

    Mandesa, Inc. has current liabilities of $9,400,000, current ratio of 1.8 times, inventory turnover of 10 times, average collection period of 44 days, and credit sales of $65,400,000. Calculate the value of cash and marketable securities. (Use 365 days a year. Do not round your intermediate calculations. Round your final answer to the nearest dollar amount.)

  • Mandesa, Inc. has current liabilities of $8,700,000, current ratio of 1.9 times, inventory turnover of 11...

    Mandesa, Inc. has current liabilities of $8,700,000, current ratio of 1.9 times, inventory turnover of 11 times, average collection period of 37 days, and credit sales of $64,700,000. Calculate the value of cash and marketable securities.

  • 3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages...

    3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio. Consider the following...

  • Liquidity Current ratio 2014 = current assets/current liabilities 204,000/89,000 = 2.292 for 2014 and 230,000/90,000 =...

    Liquidity Current ratio 2014 = current assets/current liabilities 204,000/89,000 = 2.292 for 2014 and 230,000/90,000 = 2.555 for 2015 Quick Ratio = current assets-inventory/current liabilities 204,000-66,000/89000= 1.550 for 2014 and 230,000-75000/90,000 = 1.722 for 2015 Accounts receivable turnover Credit sales/average debts Average debt 75000+82000/2 = 78500 Total sales = 3,199,900/78500 = 40.76 times (2015) Days sales outstanding = average accounts receivable/sales credit 78500/3199900 x 360 = 8.83 days (2015) Inventory turnover 66,000+75,000/2 = 70,500 Inventory turnover ratio = cost of...

  • Asset Management Ratios Corn Products, Corp. ended the year 2018 with an average collection period of...

    Asset Management Ratios Corn Products, Corp. ended the year 2018 with an average collection period of 42 days. The firm's credit sales for 2011 were $9.2 million. What is the approximate year-end 2013 balance in accounts receivable for Corn Products? (Consider 365 days a year.) Multiple Choice $4.5652 million $386.4 million $1.0586 million $0.219 million

  • Asset management ratios are used to measure how effectively a firm manages its assets, by relating...

    Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio Consider the following case: Polk Software Inc....

  • 3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages...

    3. Asset management ratios Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio. Consider the following...

  • Exercise 4-26 (Algo) Evaluating efficiency of asset management [LO4-10] The 20 21 Income statement of Anderson Medi...

    Exercise 4-26 (Algo) Evaluating efficiency of asset management [LO4-10] The 20 21 Income statement of Anderson Medical Supply Company reported net sales of $12 million cost of goods sold of $6.5 million and net income of $885,000. The following table shows the company's comparative balance sheets for 2021 and 2020 ($ in thousands) 2021 2020 $ $ 720 820 640 1.040 1.250 4. 100 1 160 2.0 20 $2.020 $6,070 Assate Cash Accounts receivable Inventory Property, plant, and equipment (net)...

  • Current ratio = 2.6 times Credit sales $1,314m Average collection period 50 days Inventory turnover 1.50...

    Current ratio = 2.6 times Credit sales $1,314m Average collection period 50 days Inventory turnover 1.50 times Total asset turnover 0.50 times Debt ratio 75% Use the above information to complete the balance sheet below. (Enter your answer in millions. Use 365 days a year.) Cash million million Current liabilities Accounts receivable $ 670 million million Long-term debt Inventory million 0 million Total debt Current assets 670 million million Stockholders' equity million 670 million Fixed assets $ 0 million Total...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT