P9-4 - 1) Working capital = Current Assets Current...

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1) Working capital = Current Assets – Current liabilities = (1,116,000 – 360,000) = $756,000 2) Current Ratio = Current Assets/Current liabilities = $1,116,000/$360,000 = 3.1 3) Quick Ratio = (Quick Assets – Inventory) / Current liabilities = ($1,116,000 - $208,000-44,000)/$360,000 = 2.4 4) Average accounts receivable = ($260,000 + 211,200)/2 = $235,600 Accounts receivable turnover = Net Sales/ Average accounts receivable = 1,608,000/235,600 = 6.83 5) Number of days sales in receivable = 365/Accounts receivable turnover = 365/6.83 = 53.44 days 6) Inventory turnover ratio Average Inventory = (208,000 + 66,400) / 2 = 137,200 Inventory turnover ratio = Cost of goods sold / Average inventory = 480,200 / 137200 = 3.5 7) Number of days sales in inventory = 365 / Inventory turnover ratio = 365 / 3.5 = 104.29 days 8) Ratio of fixed assets to long term liabilities = Fixed Assets / long term liabilities (debt)
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= 1,539,200 / 1,184,000 = 1.3 9) Ratio of liabilities to stock holder’s equity
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This note was uploaded on 04/11/2011 for the course ACC 305 taught by Professor Allison during the Spring '11 term at Western Intl..

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P9-4 - 1) Working capital = Current Assets Current...

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