The financial ratios are a measure used to know about the performance of the business. Among all the three financial ratios, following three are discussed here – 1. Acid-test ratio 2. Accounts receivables turnover 3. Days’ sales in receivables The ratios are discussed as – 1. Acid-test ratio – Acid-test ratio is the ratio used to measure the liquidity of the business to pay back it current liabilities obligations. It is calculated as – A c i d − t e s t r a t i o = Q u i c k A s s e t s C u r r e n t L i a b i l i t i e s A c i d − t e s t r a t i o = C a s h + S h o r t t e r m i n v e s t m e n t + N e t a c c o u n t s r e c e i v a b l e s C u r r e n t L i a b i l i t i e s 2. Accounts receivables turnover ratio – This ratio is an activity ratio. It is used to measure how efficiently a firm is using its assets or how the credit is issued to customers and the cash is collected. This ratio is calculated as under – A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o = N e t c r e d i t s a l e s A v e r a g e n e t a c c o u n t s r e c e i v a b l e s 3. Days’ sales in receivables – this ratio explains, how many days it takes generally to convert accounts receivables in cash or fast the accounts receivables are converted into cash. This ratio is calculated as under – D a y s ’ s a l e s i n r e c e i v a b l e s = 365 D a y s A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o Requirement 1 To compute: Acid-test Ratio for the year 2016 and 2015

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Answer 1

Question

Chapter 9, Problem

To determine

Concept Introduction:

The financial ratios are a measure used to know about the performance of the business.

Among all the three financial ratios, following three are discussed here –

1. Acid-test ratio

2. Accounts receivables turnover

3. Days’ sales in receivables

The ratios are discussed as –

1. Acid-test ratio – Acid-test ratio is the ratio used to measure the liquidity of the business to pay back it current liabilities obligations. It is calculated as –

$\begin{array}{l} A c i d - t e s t r a t i o = \frac{Q u i c k A s s e t s}{C u r r e n t L i a b i l i t i e s} \\ A c i d - t e s t r a t i o = \frac{C a s h + S h o r t t e r m i n v e s t m e n t + N e t a c c o u n t s r e c e i v a b l e s}{C u r r e n t L i a b i l i t i e s} \end{array}$

2. Accounts receivables turnover ratio – This ratio is an activity ratio. It is used to measure how efficiently a firm is using its assets or how the credit is issued to customers and the cash is collected. This ratio is calculated as under –

$A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o = \frac{N e t c r e d i t s a l e s}{A v e r a g e n e t a c c o u n t s r e c e i v a b l e s}$

3. Days’ sales in receivables – this ratio explains, how many days it takes generally to convert accounts receivables in cash or fast the accounts receivables are converted into cash. This ratio is calculated as under –

$D a y s ’ s a l e s i n r e c e i v a b l e s = \frac{365 D a y s}{A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o}$

Requirement 1

To compute:

Acid-test Ratio for the year 2016 and 2015

To determine

Requirement 2

To compute:

Accounts receivables turnover ratio for the year 2016 and 2015

To determine

Requirement 3

To compute:

Days’ sales in receivables for 2016 and 2015

To determine

Requirement 4

To compare:

Ratios for the year 2015 and 2016

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Scarce resource; discontinued product lines; negative contribution marginThe officers of Bardwell Company are reviewing the profitability of the company’s four products and the potential effects of several proposals for varying the product mix. The following is an excerpt from the income statement and other data. Total Product P Product Q Product R Product S Sales $62,600 $10,000 $18,000 $12,600 $22,000 Cost of goods sold (44,274) (4,750) (7,056) (13,968) (18,500) Gross profit $18,326 $5,250 $10,944 $(1,368) $3,500 Operating expenses (12,004) (1,990) (2,968) (2,826) (4,220) Income before taxes 6,322 $3,260 $7,976 $(4,194) $(720) Units sold 1,000 1,200 1,800 2,000 Sales price per unit $10.00 $15.00 $7.00 $11.00 Variable cost of goods sold 2.50 3.00 6.50 6.00 Variable operating expenses 1.17 1.25 1.00 1.20 Each of the following proposals is to be considered independently of the other proposals. Consider only the product changes stated in each…

Analyzing one company's make or buy and special order proposals OneCo is a retail organization in the Northeast that sells upscale clothing. Each year, store managers (in consultation with their supervisors) establish financial goals; a monthly reporting system captures actual performance. OneCo Inc. produces a single product. Cost per unit, based on the manufacture and sale of 10,000 units per month at full capacity, is shown below. Product costs Direct materials $4.00 Direct labor 1.30 Variable overhead 2.50 Fixed overhead 3.40 Sales commission 0.90 $12.10 The $0.90 sales commission is paid for every unit sold through regular channels. Market demand is such that OneCo is operating at full capacity, and the firm has found it can sell all it can produce at the market price of $16.50. Currently, OneCo is considering two separate proposals: · Gatsby, Inc. has offered to buy 1,000 units at $14.35 each. Sales commission would be $0.35 on this special order. ·…

MYS App Ch 1 M Ques M X Chat Use ta gaut Soluta acco a webs a wear a acco calcuTelesa Requ /ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fconnect.mheducation.com%252Fconnect ework i ces Saved [The following information applies to the questions displayed below.] The first production department in a process manufacturing system reports the following unit data. Beginning work in process inventory Units started and completed 35,200 units 52,800 units Units completed and transferred out Ending work in process inventory 88,000 units 17,900 units Help Save & Exercise 16-4 (Algo) Weighted average: Computing equivalent units LO P1 Prepare the production department's equivalent units of production for direct materials under each of the following three separate assumptions using the weighted average method for process costing. Equivalent Units of Production (EUP)-Weighted Average Method 1. All direct materials are added to products when…

Answer 2

Question

Chapter 9, Problem

To determine

Concept Introduction:

The financial ratios are a measure used to know about the performance of the business.

Among all the three financial ratios, following three are discussed here –

1. Acid-test ratio

2. Accounts receivables turnover

3. Days’ sales in receivables

The ratios are discussed as –

1. Acid-test ratio – Acid-test ratio is the ratio used to measure the liquidity of the business to pay back it current liabilities obligations. It is calculated as –

$\begin{array}{l} A c i d - t e s t r a t i o = \frac{Q u i c k A s s e t s}{C u r r e n t L i a b i l i t i e s} \\ A c i d - t e s t r a t i o = \frac{C a s h + S h o r t t e r m i n v e s t m e n t + N e t a c c o u n t s r e c e i v a b l e s}{C u r r e n t L i a b i l i t i e s} \end{array}$

2. Accounts receivables turnover ratio – This ratio is an activity ratio. It is used to measure how efficiently a firm is using its assets or how the credit is issued to customers and the cash is collected. This ratio is calculated as under –

$A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o = \frac{N e t c r e d i t s a l e s}{A v e r a g e n e t a c c o u n t s r e c e i v a b l e s}$

3. Days’ sales in receivables – this ratio explains, how many days it takes generally to convert accounts receivables in cash or fast the accounts receivables are converted into cash. This ratio is calculated as under –

$D a y s ’ s a l e s i n r e c e i v a b l e s = \frac{365 D a y s}{A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o}$

Requirement 1

To compute:

Acid-test Ratio for the year 2016 and 2015

To determine

Requirement 2

To compute:

Accounts receivables turnover ratio for the year 2016 and 2015

To determine

Requirement 3

To compute:

Days’ sales in receivables for 2016 and 2015

To determine

Requirement 4

To compare:

Ratios for the year 2015 and 2016

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 9, Problem

To determine

Concept Introduction:

The financial ratios are a measure used to know about the performance of the business.

Among all the three financial ratios, following three are discussed here –

1. Acid-test ratio

2. Accounts receivables turnover

3. Days’ sales in receivables

The ratios are discussed as –

1. Acid-test ratio – Acid-test ratio is the ratio used to measure the liquidity of the business to pay back it current liabilities obligations. It is calculated as –

$\begin{array}{l} A c i d - t e s t r a t i o = \frac{Q u i c k A s s e t s}{C u r r e n t L i a b i l i t i e s} \\ A c i d - t e s t r a t i o = \frac{C a s h + S h o r t t e r m i n v e s t m e n t + N e t a c c o u n t s r e c e i v a b l e s}{C u r r e n t L i a b i l i t i e s} \end{array}$

2. Accounts receivables turnover ratio – This ratio is an activity ratio. It is used to measure how efficiently a firm is using its assets or how the credit is issued to customers and the cash is collected. This ratio is calculated as under –

$A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o = \frac{N e t c r e d i t s a l e s}{A v e r a g e n e t a c c o u n t s r e c e i v a b l e s}$

3. Days’ sales in receivables – this ratio explains, how many days it takes generally to convert accounts receivables in cash or fast the accounts receivables are converted into cash. This ratio is calculated as under –

$D a y s ’ s a l e s i n r e c e i v a b l e s = \frac{365 D a y s}{A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o}$

Requirement 1

To compute:

Acid-test Ratio for the year 2016 and 2015

To determine

Requirement 2

To compute:

Accounts receivables turnover ratio for the year 2016 and 2015

To determine

Requirement 3

To compute:

Days’ sales in receivables for 2016 and 2015

To determine

Requirement 4

To compare:

Ratios for the year 2015 and 2016

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 9, Problem

To determine

Concept Introduction:

The financial ratios are a measure used to know about the performance of the business.

Among all the three financial ratios, following three are discussed here –

1. Acid-test ratio

2. Accounts receivables turnover

3. Days’ sales in receivables

The ratios are discussed as –

1. Acid-test ratio – Acid-test ratio is the ratio used to measure the liquidity of the business to pay back it current liabilities obligations. It is calculated as –

$\begin{array}{l} A c i d - t e s t r a t i o = \frac{Q u i c k A s s e t s}{C u r r e n t L i a b i l i t i e s} \\ A c i d - t e s t r a t i o = \frac{C a s h + S h o r t t e r m i n v e s t m e n t + N e t a c c o u n t s r e c e i v a b l e s}{C u r r e n t L i a b i l i t i e s} \end{array}$

2. Accounts receivables turnover ratio – This ratio is an activity ratio. It is used to measure how efficiently a firm is using its assets or how the credit is issued to customers and the cash is collected. This ratio is calculated as under –

$A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o = \frac{N e t c r e d i t s a l e s}{A v e r a g e n e t a c c o u n t s r e c e i v a b l e s}$

3. Days’ sales in receivables – this ratio explains, how many days it takes generally to convert accounts receivables in cash or fast the accounts receivables are converted into cash. This ratio is calculated as under –

$D a y s ’ s a l e s i n r e c e i v a b l e s = \frac{365 D a y s}{A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o}$

Requirement 1

To compute:

Acid-test Ratio for the year 2016 and 2015

To determine

Requirement 2

To compute:

Accounts receivables turnover ratio for the year 2016 and 2015

To determine

Requirement 3

To compute:

Days’ sales in receivables for 2016 and 2015

To determine

Requirement 4

To compare:

Ratios for the year 2015 and 2016

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 9, Problem

To determine

Concept Introduction:

The financial ratios are a measure used to know about the performance of the business.

Among all the three financial ratios, following three are discussed here –

1. Acid-test ratio

2. Accounts receivables turnover

3. Days’ sales in receivables

The ratios are discussed as –

1. Acid-test ratio – Acid-test ratio is the ratio used to measure the liquidity of the business to pay back it current liabilities obligations. It is calculated as –

$\begin{array}{l} A c i d - t e s t r a t i o = \frac{Q u i c k A s s e t s}{C u r r e n t L i a b i l i t i e s} \\ A c i d - t e s t r a t i o = \frac{C a s h + S h o r t t e r m i n v e s t m e n t + N e t a c c o u n t s r e c e i v a b l e s}{C u r r e n t L i a b i l i t i e s} \end{array}$

2. Accounts receivables turnover ratio – This ratio is an activity ratio. It is used to measure how efficiently a firm is using its assets or how the credit is issued to customers and the cash is collected. This ratio is calculated as under –

$A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o = \frac{N e t c r e d i t s a l e s}{A v e r a g e n e t a c c o u n t s r e c e i v a b l e s}$

3. Days’ sales in receivables – this ratio explains, how many days it takes generally to convert accounts receivables in cash or fast the accounts receivables are converted into cash. This ratio is calculated as under –

$D a y s ’ s a l e s i n r e c e i v a b l e s = \frac{365 D a y s}{A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o}$

Requirement 1

To compute:

Acid-test Ratio for the year 2016 and 2015

To determine

Requirement 2

To compute:

Accounts receivables turnover ratio for the year 2016 and 2015

To determine

Requirement 3

To compute:

Days’ sales in receivables for 2016 and 2015

To determine

Requirement 4

To compare:

Ratios for the year 2015 and 2016

Answer 6

Chapter 9, Problem

To determine

Concept Introduction:

The financial ratios are a measure used to know about the performance of the business.

Among all the three financial ratios, following three are discussed here –

1. Acid-test ratio

2. Accounts receivables turnover

3. Days’ sales in receivables

The ratios are discussed as –

1. Acid-test ratio – Acid-test ratio is the ratio used to measure the liquidity of the business to pay back it current liabilities obligations. It is calculated as –

$\begin{array}{l} A c i d - t e s t r a t i o = \frac{Q u i c k A s s e t s}{C u r r e n t L i a b i l i t i e s} \\ A c i d - t e s t r a t i o = \frac{C a s h + S h o r t t e r m i n v e s t m e n t + N e t a c c o u n t s r e c e i v a b l e s}{C u r r e n t L i a b i l i t i e s} \end{array}$

2. Accounts receivables turnover ratio – This ratio is an activity ratio. It is used to measure how efficiently a firm is using its assets or how the credit is issued to customers and the cash is collected. This ratio is calculated as under –

$A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o = \frac{N e t c r e d i t s a l e s}{A v e r a g e n e t a c c o u n t s r e c e i v a b l e s}$

3. Days’ sales in receivables – this ratio explains, how many days it takes generally to convert accounts receivables in cash or fast the accounts receivables are converted into cash. This ratio is calculated as under –

$D a y s ’ s a l e s i n r e c e i v a b l e s = \frac{365 D a y s}{A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o}$

Requirement 1

To compute:

Acid-test Ratio for the year 2016 and 2015

Answer 7

Chapter 9, Problem

To determine

Concept Introduction:

The financial ratios are a measure used to know about the performance of the business.

Among all the three financial ratios, following three are discussed here –

1. Acid-test ratio

2. Accounts receivables turnover

3. Days’ sales in receivables

The ratios are discussed as –

1. Acid-test ratio – Acid-test ratio is the ratio used to measure the liquidity of the business to pay back it current liabilities obligations. It is calculated as –

$\begin{array}{l} A c i d - t e s t r a t i o = \frac{Q u i c k A s s e t s}{C u r r e n t L i a b i l i t i e s} \\ A c i d - t e s t r a t i o = \frac{C a s h + S h o r t t e r m i n v e s t m e n t + N e t a c c o u n t s r e c e i v a b l e s}{C u r r e n t L i a b i l i t i e s} \end{array}$

2. Accounts receivables turnover ratio – This ratio is an activity ratio. It is used to measure how efficiently a firm is using its assets or how the credit is issued to customers and the cash is collected. This ratio is calculated as under –

$A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o = \frac{N e t c r e d i t s a l e s}{A v e r a g e n e t a c c o u n t s r e c e i v a b l e s}$

3. Days’ sales in receivables – this ratio explains, how many days it takes generally to convert accounts receivables in cash or fast the accounts receivables are converted into cash. This ratio is calculated as under –

$D a y s ’ s a l e s i n r e c e i v a b l e s = \frac{365 D a y s}{A c c o u n t s r e c e i v a b l e s t u r n o v e r r a t i o}$

Requirement 1

To compute:

Acid-test Ratio for the year 2016 and 2015

Answer 8

To determine

Requirement 2

To compute:

Accounts receivables turnover ratio for the year 2016 and 2015

Answer 9

To determine

Requirement 2

To compute:

Accounts receivables turnover ratio for the year 2016 and 2015

Answer 10

To determine

Requirement 3

To compute:

Days’ sales in receivables for 2016 and 2015

Answer 11

To determine

Requirement 3

To compute:

Days’ sales in receivables for 2016 and 2015

Answer 12

To determine

Requirement 4

To compare:

Ratios for the year 2015 and 2016

Answer 13

To determine

Requirement 4

To compare:

Ratios for the year 2015 and 2016

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 9 - 1. With good internal controls, the person who...Ch. 9 - Prob. 2QC Ch. 9 - Which of the following is a limitation of the...Ch. 9 - 3. The entry to record a write-off of an...Ch. 9 - Brickman Company uses the allowance method to...Ch. 9 - Brickman’s ending balance of accounts Receivable...Ch. 9 - At December 31 year-end, Crain Company has an...Ch. 9 - Using the data in the preceding question, what...Ch. 9 - At year-end, Schultz Company has cash of $11,600,...Ch. 9 - Using the data in the preceding question, assume...

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Requirement 2

To compute:

Accounts receivables turnover ratio for the year 2016 and 2015

Requirement 3

To compute:

Days’ sales in receivables for 2016 and 2015

Requirement 4

To compare:

Ratios for the year 2015 and 2016

Want to see the full answer?

Chapter 9 Solutions

Videos

Requirement 2 To compute: Accounts receivables turnover ratio for the year 2016 and 2015

Requirement 3 To compute: Days’ sales in receivables for 2016 and 2015

Requirement 4 To compare: Ratios for the year 2015 and 2016

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Chapter 9 Solutions

Requirement 2

To compute:

Accounts receivables turnover ratio for the year 2016 and 2015

Requirement 3

To compute:

Days’ sales in receivables for 2016 and 2015

Requirement 4

To compare:

Ratios for the year 2015 and 2016