**Educational Content: Financial Analysis Exercise**The following exercise is designed to help students understand how to compute and analyze financial ratios using the data provided from Perfection Cosmetic Supply for the years 2024, 2023, and 2022. ### Requirement 1a: Compute the Acid-Test Ratio**Task:**Calculate the acid-test ratios for the years 2024 and 2023. Round the result to two decimal places.**Abbreviations:**- Cash = Cash including cash equivalents- ST invest. = Short-term investments**Formula:** Acid-test ratio = (Cash + Short-term investments + Accounts receivable, net) / Total current liabilities**Data Table:****Balance Sheet—Partial:**- **Current Assets:** - Cash: - 2024: $95,000 - 2023: $65,000 - 2022: $45,000 - Short-term Investments: - 2024: $130,000 - 2023: $175,000 - 2022: $150,000 - Accounts Receivable, Net: - 2024: $290,000 - 2023: $230,000 - 2022: $245,000 - Merchandise Inventory: - 2024: $330,000 - 2023: $315,000 - 2022: $290,000 - Prepaid Expenses: - 2024: $80,000 - 2023: $40,000 - 2022: $50,000- **Total Current Assets:** - 2024: $925,000 - 2023: $825,000 - 2022: $780,000 - **Total Current Liabilities:** - 2024: $555,000 - 2023: $625,000 - 2022: $620,000 **Income Statement—Partial:**- **Net Sales (all on account):** - 2024: $5,830,000 - 2023: $5,190,000 - 2022: $4,200,000 **Additional Calculations:**1.

Requirement 1a. Compute the acid-test ratio for 2024 and 2023. (Round to two decimals.) (Abbreviations used: Cash Cash including cash equivalents; ST invest.= short-term investments. Round the acid test ratios to two decimals, X.XX.) = = Acid-test ratio 2024 2023 Requirements 1. Compute these ratios for 2024 and 2023: a. Acid-test ratio (Round to two decimals.) b. Accounts receivable turnover (Round to two decimals.) c. Days' sales in receivables (Round to the nearest whole day.) 2. Considering each ratio individually, which ratios improved from 2023 to 2024 and which ratios deteriorated? Is the trend favorable or unfavorable for the company? Print Done - X = = Data table Balance sheet-partial Current Assets: Cash Short-term Investments Accounts Receivable, Net Merchandise Inventory Prepaid Expenses Total Current Assets Total Current Liabilities Income statement-partial Net Sales (all on account) Print $ 2024 2023 2022 Done - X 65,000 $ 45,000 95,000 $ 130,000 175,000 150,000 290,000 230,000 245,000 330,000 315,000 290,000 40,000 50,000 80,000 925,000 825,000 555,000 625,000 620,000 780,000 5,830,000 5,190,000 4,200,000

Requirement 1a. Compute the acid-test ratio for 2024 and 2023. (Round to two decimals.) (Abbreviations used: Cash Cash including cash equivalents; ST invest.= short-term investments. Round the acid test ratios to two decimals, X.XX.) = = Acid-test ratio 2024 2023 Requirements 1. Compute these ratios for 2024 and 2023: a. Acid-test ratio (Round to two decimals.) b. Accounts receivable turnover (Round to two decimals.) c. Days' sales in receivables (Round to the nearest whole day.) 2. Considering each ratio individually, which ratios improved from 2023 to 2024 and which ratios deteriorated? Is the trend favorable or unfavorable for the company? Print Done - X = = Data table Balance sheet-partial Current Assets: Cash Short-term Investments Accounts Receivable, Net Merchandise Inventory Prepaid Expenses Total Current Assets Total Current Liabilities Income statement-partial Net Sales (all on account) Print $ 2024 2023 2022 Done - X 65,000 $ 45,000 95,000 $ 130,000 175,000 150,000 290,000 230,000 245,000 330,000 315,000 290,000 40,000 50,000 80,000 925,000 825,000 555,000 625,000 620,000 780,000 5,830,000 5,190,000 4,200,000

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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Q1
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H1.
What is the IRR of the following set of cash flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Year 0 1 2 3 IRR Cash Flow -$ 15,500 6,200 7,500 6,000 %
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← The comparative financial statements of Gold Cosmetic Supply for 2024, 2023, and 2022 include the data shown here: EEE (Click the icon to view the comparative financial data.) Read the requirements. Requirement 1a. Compute the acid-test ratio for 2024 and 2023. (Round to two decimals.) (Abbreviations used: Cash Cash including cash equivalents; ST invest. = short-term investments. Round the acid test ratios to two decimals, XXX) 2024 2023 2024 2023 2024 2023 Requirement 1b. Compute the accounts receivable turnover for 2024 and 2023. (Round to two decimals.) (Abbreviations used: AR turn = accounts receivable turnover ratio; Cash = Cash including cash equivalents; ST invest. = short-term investments. Round the accounts receivable turnover ratios to two decimals, X.XX.) AR turn The acid-test ratio The accounts receivable turnover = pla The days' sales in receivables Requirement 1c. Compute the days' sales in receivables for 2024 and 2023 (Round to the nearest whole day.) (Abbreviations…
please determine the rate of return of the cash flows shown in the table below. Year 0 1 2 3 4 Cash flow -3,000 1,000 900 900 900
Consider the following cash flows: Year 01234 Cash Flow -$5,100 1,500 2,600 1,300 1,000 What is the payback period for the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Payback period years
Please explain why the option is correct and remaining incorrect in detail answer in text explain each and every option need correct answer
Consider the cash flows in the table bolow: \table[[ Year, 0, 1, 2, 3, 4, 5], [Cash Flow, - $ 100, $50, $60, $70, $80, $140 11. Consider the cash flows in the table below: Year 0 Cash Flow -$100 1 $50 2 $60 Which one of the following is correct for this cash flow (circle)? A. 100 50+ 10(A/G, 1, 5)+50(P/F, 1,5) B. (50(P/A, i, 5)+10(P/G, i, 5) +50(P/F, i, 5))/ (100)=1 C. 100(P/A, 1, 5)=50+10(A/G, I, 5) D. None of the equations are correct. 3 $70 4 $80 5 $140
B. TRUE OR FALSE. 1) T F 2) T F 3) T F 4) T F 5) 6) T F T F 7) T F Indicate whether each statement is true or false. Cash equivalents include short-term, highly liquid investments that mature in 6 months, such as T-Bills and T-Notes. The FASB prefers that the direct method of the statement of cash flows be used; but if used, a reconciliation of net income to cash provided by operations must also be included. If 5% of revenues are derived from a single customer, the company must disclose the total amount of revenues from each such customer. Although potentially helpful to financial statement readers, information about significant foreign sales of a multinational corporation does not have to be disclosed in the notes to the financial statements. Auditors rarely give unmodified (unqualified) audit opinions because the SEC will bar corporations receiving such opinions from selling their stock publicly. The direct method of cash flow statement is the most popular method used by corporations…
What is the IRR of the following set of cash flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Year Cash Flow 0 –$ 17,300 1 8,000 2 9,300 3 7,800