Question

all anwsers must be entered as a formula.

X BS.BE FILE HOME INSERT Calculating liquidity ratios - Excel FORMULAS DATA REVIEW ? x PAGE LAYOUT VIEW - Sign In Calibri - 11 SAA B IU. E. A ME Paste Alignment Number LD Conditional Format as Cell Formatting Table Styles Styles Cells Clipboard Font EF G SDJ, Inc., has net working capital of $2,710, current liabilities of $3,950, and inventory of $3,420. What is the current ratio? What is the quick ratio? Net working capital $ Current liabilities $ Inventory $ 2,710 3,950 3,420 8 10 Complete the following analysis. Do not hard code values in your calculations. Current assets Current ratio Quick ratio

Answer 1

1 Given Net working capital 2710 Current liabilities 3950 Inventory 3420 Formula for Current ratio: Current assets Current ratio = Current liabilities Current assets = Current liabilities + net working capital = 3950+2710 = 6660 6660 current ratio = 3950 1.6861 Formula for Quick ratio: Quick ratio = Current assets – Inventory Current liabilities (6660-3420)/3950 0.8203

2 Given Accounts receivable Credit sales Days per year 438720 5E+06 365 Formula for receivables turnovar = Net credit sales Accounts receivables Receivables turnovar = 5173820 438720 Receivables turnovar = 11.793 Days sales in receivables = Receivables turnovar Days per year Days sales in receivables = Days sales in receivables = 11.79/365 0.0323