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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