I am trying to find the accurate solution to this general accounting problem with appropriate explanations. Riley Corp. had a quick ratio of 1.2, a currentratio of 2.5, an inventory turnover of 6, andtotal current assets of $900,000. The companyalso had cash and equivalents of $150,000. Ifcost of goods sold was 80% of total sales, whatwere Riley's annual sales and days' salesoutstanding (DSO)?

Step 1: Definition of Days' Sales Outstanding (DSO)Days' Sales Outstanding (DSO) measures the…

Answered: Riley Corp. had a quick ratio of 1.2, a…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter2: Analysis Of Financial Statements

Section: Chapter Questions

Problem 12PROB

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Riley Corp. had a quick ratio of 1.2, a current ratio of 2.5, an inventory turnover of 6, and total current assets of $900,000. The company also had cash and equivalents of $150,000. If cost of goods sold was 80% of total sales, what were Riley's annual sales and days' sales outstanding (DSO)?
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Riley Corp. had a quick ratio of 1.2, a current ratio of 2.5, an inventory turnover of 6, and total current assets of $900,000. The company also had cash and equivalents of $150,000. If cost of goods sold was 80% of total sales, what were Riley's annual sales and days' sales outstanding (DSO)?