Computation of current ratio and working capital

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Reference no: EM1315909

Computation of Current ratio, Working capital, Acid-test ratio, Receivables turnover and Inventory turnover.

Boyle Corporation had the following comparative current assets and current liabilities:

 

Dec. 31, 2002

Dec. 31, 2001

Current assets

 

 

Cash

$60,000

$30,000

Marketable securities

40,000

10,000

Accounts receivable

55,000

95,000

Inventory

110,000

90,000

Prepaid expenses

35,000

20,000

 



Total current assets

$300,000

$245,000

Current liabilities

 

 

Accounts payable

$140,000

$110,000

Salaries payable

40,000

30,000

Income tax payable

20,000

15,000

 



Total current liabilities

$200,000

$155,000

During 2002, credit sales and cost of goods sold were $750,000 and $400,000, respectively.

INSTRUCTIONS
Compute the following liquidity measures for 2002:

1. Current ratio.
2. Working capital.
3. Acid-test ratio.
4. Receivables turnover.
5. Inventory turnover.

Reference no: EM1315909

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