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The following items are reported on a company's financial statements for 2015 and 2016:

($ in Thousands) 2015 2016
Cash $290 $300
Short-term investments 100 100
Receivables (net) 160 200
Inventory 140 160
Accounts payable 350 400
Sales 1740 1800
Cost of goods sold 1120 1200

Determine the following measures for 2016:
a. Current ratio
b. Accounts receivable turnover
c. Quick ratio
d. Inventory turnover

Respuesta :

ayokenny2001

Answer:

See below

Explanation:

1. Current ratio

= Current asset / Current liabilities

Current asset = cash + marketable securities + accounts receivables + inventory

= $300 + $100 + $200 + $160

= $760

Current liabilities = accounts payable

Current liabilities = $400

Current ratio = $760 / $400

Current ratio = 1:9:1

2. Accounts receivable turnover

= Net credit sales / [(Beginning receivables + ending receivables) /2]

= $1,800 / [ ($160 + $200)/2]

= $1,800 / $180

= 10 times

3. Quick ratio

= Current asset - Inventory / Current liabilities

= $300 + $100 + $200 - $160 / $400

= $440 / $400

= 1:1:1