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:
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|
|
|
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)