Using the information below, what is Puppy Company's acid-test ratio (quick ratio) for 2019? The following financial statement accounts and balances are for Puppy Company: Cash Accounts Receivable Total Inventory Prepaid Expenses Total Current Assets Property and Equipment Total Assets Total Current Liabilities Total Debt Total Liabilities 2019 82,370 6,555 327,750 4,288 420,963 290,750 711,713 111,450 45,000 156 450 2018 71,740 5,963 364,680 5,382 447,765 250,612 698,377 128,857 50,512 179 369
Using the information below, what is Puppy Company's acid-test ratio (quick ratio) for 2019? The following financial statement accounts and balances are for Puppy Company: Cash Accounts Receivable Total Inventory Prepaid Expenses Total Current Assets Property and Equipment Total Assets Total Current Liabilities Total Debt Total Liabilities 2019 82,370 6,555 327,750 4,288 420,963 290,750 711,713 111,450 45,000 156 450 2018 71,740 5,963 364,680 5,382 447,765 250,612 698,377 128,857 50,512 179 369
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Here are some formulas that you may find helpful:
Item
Formula
Desired Result
Current assets / Current liabilities
Cash+ short-term investments + AR /
Current liabilities
Sales /
Average gross accounts receivable
|Days in year / Receivables turnover
|Cost of goods sold / Average inventory
|Days in year / Inventory turnover
Total liabilities /Total assets
Current Ratio
Quick Ratio (Acid-test)
Higher
Higher
Receivables turnover
Higher
Collection Period
Inventory turnover
Days sales in inventory
Debt to Total Assets
Lower
| Higher
Lower
Lower
Debt to Equity
Total liabilities /
Owner's (Shareholders') Equity
Gross Profit / Total revenue
Lower
Gross Margin (%) (Gross
Profit Margin)
Profit Margin (%)
(Net Margin)
Higher
Net profit / Total revenue
Higher
Net sales / Average total assets
Net profit / average total assets
Profit / Average shareholders' equity
Higher
Higher
Asset turnover
Return on Assets
Return on Equity (ROE)
Higher
8.0%
798%
0.8:1
8.0:1
Transcribed Image Text:Using the information below, what is Puppy Company's acid-test ratio (quick ratio)
for 2019?
The following financial statement accounts and balances are for Puppy Company:
2019
2018
Cash
Accounts Receivable
Total Inventory
Prepaid Expenses
Total Current Assets
Property and Equipment
Total Assets
Total Current Liabilities
Total Debt
Total Liabilities
Total Shareholders’
Equity
Sales / Net Revenue /
Net
Credit Sales
COGS (Cost of Goods
Sold)
Gross Profit
82,370
6,555
327,750
4,288
420,963
290,750
711,713
111,450
45,000
156,450
555,263
71,740
5,963
364,680
5,382
447,765
250,612
698,377
128,857
50,512
179,369
519,008
2,250,000
2,064,676
1,370,500
1,299,092|
765,584
Net Income / Profit
879,500
207,850
250,094
Here are some formulas that you may find helpful:
item
Formula
Desired Result
Current Ratio
Quick Ratio (Acid-test)
Current assets / Current liabilities
Cash+ short-term investments + AR /
Current liabilities
Higher
Higher
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