Use the following information to answer items 1-3: SHOW YOUR WORK
At December 31 a company's records show the following information:
- Cash $10,000
- Accounts Receivable 30,000
- Inventory 80,000
- Prepaid Insurance 6, 000
- Long-term Assets 200,000
- Accounts Payable 30,000
- Notes Payable due in 10months 25,000
- Wages Payable 5,000
- Long-term Liabilities 70,000
- Stockholders' (Owner's) Equity 196,000
1. Calculate the current ratio
2. Calculate the Debt to Equity ratio
3. Calculate the Return on Assets
Use the following information to answer items 4-5: SHOW YOUR WORK
For its most recent year a company had Sales (all on credit) of $830, 000 and Cost of Goods Sold of $525, 000. At the end of the year its Accounts Receivable were $86,000 and its Inventory was $110,000. Accounts Payable was $5,000 and Net Income was $42,000.
4. Calculate the Accounts Receivable Turn Days
5. Calculate the Inventory Turn days