Homework Week 5 Chapter 08 problems Save Score 0 of 1 pt 50

Homework: Week 5 - Chapter 08 problems Save Score: 0 of 1 pt 5017(4 complete) ? HW Score: 25.48%, 1.78 of 7 pts P9-33A (similar to) Question Help * The comparative financial statements of Lakeland Cosmetic Supply for 2016, 2015, and 2014 include the data shown here: BEE Click the icon to view the comparative financial data.) Requirements 1. Compute these ratios for 2016 and 2015: a. Acid-test ratio (Round to two decimals.) b. Accounts receivable turnover (Round to two decimals.) c. Days sales in receivables (Round to the nearest whole day.) 2. Considering each ratio individually, which ratios improved from 2015 to 2016 and which ratios deteriorated? Is the trend favorable or unfavorable for the company? Requirement 1a. Compute the acid-test ratio for 2016 and 2015, (Abbreviations used Cash s Cash including cash equivalents;ST invest. short-term investments Round the acid test ratios to two decimals, XXX) - Acid-test ratio 2016 2015

Solution

   1a)acid test rario

   A.T.R=Current assets-inventory-pre paid expense/current liabilites

1B)accounts turnover ratio

accounts turnover ratio=net sales/avg accounts recivable

?    AVG ACCONTS RECIVABLE=OPENIG+CLOSEING/2

?   

1C)day sales in recivables

? day sales in recivables=365/ recivableturnover ratio

2)statement showing improve/deteriorate bellow raios from 2015-2016

F=Favourable

year	Current assets-inventory-pre paid expense/	current liabilites	A.T.R
2016	955000-370000-75000	550000	0.93
2015	840000-335000-20000	600000	0.81