Reference no: EM131539773
Assignment: Financial Ratios
Given the information below, for 2013 and 2014, calculate the current ratio, quick ratio, accounts receivable turnover, and collection period. Include both your calculations and a brief explanation (3-4 sentences) to explain the ratio and what the resulting change from 2013 to 2014 might mean for the company.
Note: The term income from operations is equivalent to the term sales.
2014 2013
Cash $ 30,000 $ 20,000
Short term investment 37,000 18,000
accounts receivable net 120,0000 140,000
inventory 290,000 320,000
prepaid expenses 7,000 10,000
total assets 600,000 750,000
total current liabilities 220,000 200,000
long term note payable 150,000 185,000
income from operation 145,000 180,000
interest expenses 22,000 26,000
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