The current ratio for E News Incorporation for the year 2017 and 2018.
The current ratio for E News Incorporation for the year 2017 and 2018.
Solution Summary: The author explains that the current ratio of E News Incorporation for the year 2017 and 2018 is 2.92 and 2.15 respectively. The quick (acid-test) ratio is a more rigorous test of solvency.
Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.
Chapter 12, Problem 12.21AE
Requirement - 1.a.
To determine
To Compute: The current ratio for E News Incorporation for the year 2017 and 2018.
Requirement 1.b.
To determine
To Compute: The quick (acid-test) ratio for E News Incorporation for the year 2017 and 2018.
Requirement 1.c.
To determine
To Compute: The inventory turnover and days’ inventory outstanding (DIO) for E News Incorporation for the year 2017 and 2018.
Requirement 1.d.
To determine
To Compute: The accounts receivable turnover for E News Incorporation for the year 2017 and 2018.
Requirement 1.e.
To determine
To Compute: The days’ sales outstanding for E News Incorporation for the year 2017 and 2018.
Requirement 1.f.
To determine
To Compute: The accounts payable turnover and days’ payable outstanding (DPO) for E News Incorporation for the year 2017 and 2018.
Requirement 1.g.
To determine
To Compute: The cash conversion cycle (in days) for E News Incorporation for the year 2017 and 2018.
Requirement 2
To determine
To Comment: Whether the above calculated ratios of 2018 has improved or deteriorated from 2017.
Requirement 3
To determine
To Mention: The necessary improvements needed in next year.
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Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning