operating assets equals operating assets equals operating assets equals estions

Question

operating assets equals operating assets equals operating assets equals estions 26-30 are Problem Solving Questions (25 points). llowing data were taken from the annual financial statements of Smnto calculate the Working capital, Current ratio, Quick ratio, uate the results of your computations in regard t209 turnover for turnover for 20 -term liquidity of the firm 2011 $ 500,000 2010 $ 400,000 300,000 1,500,000 1,020,000 200,000 110,000 ssets iabilities S 450,000 390,000 1.450,000 1180,000 280.000 340,000 1,400,000 oods sold 1,120,000 250,000 s receivable 105,000 120,000 ill's statement of consolidated income is as follows

Explanation / Answer

2011 2010

Working capital = current assets - current

Liabilities 160000 100000

Current ratio = current assets/current

Liabilities 1.470 1.333

Quick ratio = current assets-inventory/

Current liabilities 0.735 0.666

Inventory turnover ratio =

Sales/inventory 5.60 7.50

Or cost of goods sold/inventory 4.48 5.10  

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