Computing and Interpreting Liquidity Ratios
Cintas Corporation is the largest uniform supplier in North America, providing products and services to approximately 800,000 businesses of all types. Selected information from its 2008 annual report follows. For the 2008 fiscal year, the company reported sales revenue of $2.8 billion and Cost of Goods Sold of $1.6 billion.
Fiscal Year | 2008 | 2007 |
Balance Sheet (amounts in millions) |
|
|
Cash | $ 70 | $ 35 |
Accounts Receivable, less allowance of $15 and $15 | 430 | 410 |
Inventories | 240 | 230 |
Prepaid Expenses | 10 | 15 |
Other Current Assets | 410 | 345 |
Accounts Payable | 95 | 65 |
Wages Payable | 50 | 60 |
Income Taxes Payable | 10 | 70 |
Other Current Liabilities | 210 | 205 |
Required:
Assuming that all sales are on credit, compute the current ratio (two decimal places), inventory turnover ratio (one decimal place), and accounts receivable turnover ratio (one decimal place) for 2008. Explain what each ratio means.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.