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Current Year Preceding Year Balance Sheet: Cash $ 16,000 $ 26,000 Short-term Investments 19,000 28,000 Net Accounts Receivable 60,000 92,000 Merchandise Inventory 78,000 74,000 Prepaid Expenses 17,000 6,000 Total Current Assets 190,000 226,000 Total Current Liabilities 136,000 82,000 Income Statement: Net Credit Sales $ 476,000 Cost of Goods Sold 312,000

Current Year Preceding Year Balance Sheet: Cash $ 16,000 $ 26,000 Short-term Investments 19,000 28,000 Net Accounts Receivable 60,000 92,000 Merchandise Inventory 78,000 74,000 Prepaid Expenses 17,000 6,000 Total Current Assets 190,000 226,000 Total Current Liabilities 136,000 82,000 Income Statement: Net Credit Sales $ 476,000 Cost of Goods Sold 312,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Computing key ratios

The financial statements of Valerie’s Natural Foods include the following items:

Compute the following ratios for the current year:

a. Current ratio

b. Cash ratio

c. Acid-test ratio

d. Inventory turnover

e. Days’ sales in inventory

f. Days’ sales in receivables

g. Gross profit percentage

Current Year Preceding Year Balance Sheet: Cash $ 16,000 $ 26,000 Short-term Investments 19,000 28,000 Net Accounts Receivable 60,000 92,000 Merchandise Inventory 78,000 74,000 Prepaid Expenses 17,000 6,000 Total Current Assets 190,000 226,000 Total Current Liabilities 136,000 82,000 Income Statement: Net Credit Sales $ 476,000 Cost of Goods Sold 312,000
Transcribed Image Text:Current Year Preceding Year Balance Sheet: Cash $ 16,000 $ 26,000 Short-term Investments 19,000 28,000 Net Accounts Receivable 60,000 92,000 Merchandise Inventory 78,000 74,000 Prepaid Expenses 17,000 6,000 Total Current Assets 190,000 226,000 Total Current Liabilities 136,000 82,000 Income Statement: Net Credit Sales $ 476,000 Cost of Goods Sold 312,000
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