Compute the current ratio for the current year

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Reference no: EM131807622

ED-20 Computing key ratios

The financial statements of Victory's Natural Foods include the following items:

	Current Year	Preceding Year
Balance Sheet:
Cash	20,000	24,000
Short-term Investments	18,000	26,000
Net Accounts Receivable	50,000	78,000
Merchandise Inventory	70,000	66,000
Prepaid Expenses	12,000	10,000
Total Current Assets	170,000	204,000
Total Current Liabilities	129,000	92,000
Income Statement:
Net Credit Sales	5 478,000
Cost of Goods Sold	318,000

Compute the following ratios for the current year:

a. Current ratio

b. Cash ratio

c. Acid-test ratio

d. Inventory turnover

e. Days sales in inventory

f. Days' sales in receivables

g. Cross profit percentage (assume all sales are on credit)

Reference no: EM131807622

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