ACC 201 -- Week5 Assignment1 CH-9

ACC 201 -- Week5 Assignment1 CH-9 - Ratio Analysis 1...

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Ratio Analysis 1 Chapter 9: 9-23 Ratio Analysis Ashley Dyal ACC 201 Ms. Rayford March 6, 2011
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Ratio Analysis 2 Chapter 9: 9-23 Ratio Analysis Problem 9-23 Use the financial statements for Pocca Company from Problem 9-22 to calculate the following ratios for 2006 and 2005. A. Working capital 2006 - $576,000 - $151,800 = $424,200 2005 - $516,000 - $121,000 = 395,000 B. Current Ratio 2006 - $576,000/$151,800 = $3.79 : 1 2005 - $516,000/$121,000 = $4.26 : 1 C. Quick Ratio 2006 - $90,000/$151,800 = .6 : 1 2005 - $64,000/$121,000 = .5 : 1 D. Acct Receivable Turnover 2006 - $238,000/$50,000 = 4.76 times 2005 - $215,000/$46,500 = 4.62 times E. Average number of days to collect accounts receivable 2006 - 365/4.76 = 76.68 = 77 days 2005 - 365/4.62 = 79.00 = 79 days F. Inventory Turnover 2006 - $120,000/$139,000 = .86 times 2005 - $103,000/$141,500 = .73 times
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Ratio Analysis 3 G. Average number of days to sell inventory 2006 - 365/.86 = 424.42 = 424 days 2005 - 365/.73 = 500 days H. Debt to assets Ratio
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This note was uploaded on 04/18/2011 for the course ACC 201 taught by Professor Alao during the Spring '10 term at Ashford University.

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ACC 201 -- Week5 Assignment1 CH-9 - Ratio Analysis 1...

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