Problem

(L.OBJ. 8) Using ratio data to evaluate a company’s financial position [20—30 min] The...

(L.OBJ. 8) Using ratio data to evaluate a company’s financial position [20—30 min]

The comparative financial statements of True Beauty Cosmetic Supply for 2012, 2011, and 2010 include the data that follow:

Requirements

1. Compute these ratios for 2012 and 2011:

a. Current ratio

b. Acid-test ratio

c. Days’ sales in receivables

2. Considering each ratio individually, which ratios improved from 2011 to 2012 and which ratios deteriorated? Is the trend favorable or unfavorable for the company?

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Solutions For Problems in Chapter 8

42CP
43PS

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