Financial statements for Campbell Company follow CAMPBELL COMPANY Balance Sheets

Question

Financial statements for Campbell Company follow CAMPBELL COMPANY Balance Sheets As of December 31 2019 2018 Assets Current assets $18,00014,000 6,400 37,000 138,000 14,000 209,400 15,000 260,000 25,000 $569,400 $509,400 Cash Marketable securities Accounts receivable (net) Inventories Prepaid items 20,400 45,000 130,000 29,000 242,400 22,000 275,000 30,000 Total current assets Investments Plant (net) Land Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable $ 17,400 58,800 25,000 101,200 7,900 45,000 19,000 71,900 Total current liabilities Noncurrent liabilities Bonds payable Other 140,000 28,000 168,000 269,200 140,000 23,000 163,000 234,900 Total noncurrent liabilities Total liabilities Stockholders' equity Preferred stock, (par value $10, 4% cumulative, non-participating: 9,000 shares authorized and issued) Common stock (no par; 50,000 shares authorized; 10,000 shares issued) Retained earnings 90,000 90,000 94,500 274,500 $569,400 $509,400 90,000 90,000 120,200 300,200 Total stockholders' equity Total liabilities and stockholders' equity

Explanation / Answer

Part 1 - Calculation of Working Capital

Working Capital = Shows the Liquidity position. Calculated after deducting Current liabilities from Current Assets

Part 2 - Current Ratio.

Current Ratio is Ratio of current assets to current liabilities

Part 3 - Calculation of quick ratio

Difference between quick ratio and current is that quick ratio does not include prepaid expenses and Inventories

Part 4 - Receivables Turnover

Receivables turnover ratio measures the number of times company sells and collects average receivable.

Average Receivables

$41000

[$37000+$45000]/2

$37500

[$37000+$38000]/2

Receivable Turnover

Part 5 - Average days to collect accounts receivable

This is calculated by dividing receivables to turnover by Total Numbet of days in a year

Part 6 - Inventory Turnover ratio

Average Inventory calculation

Inventory Turnover

Part 7 - Number of days to sell Inventory

This ratio measures how many days on an average company takes to sell inventory

Particulars 2019 2018 Current Assets (A) $242400 $209400 Current Labilities (B) $101200 $71900 Working Capital (A - B) $141200 $137500

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