Suppose Nordstrom Inc which operates department stores in nu

Suppose Nordstrom, Inc., which operates department stores in numerous states, has the following selected financial statement data for a recent year INC. Balance Sheet (partial) Beginning-of- Year (in millions) End-of-Year $1,352 3,460 1,527 150 405 $6,894 $3,424 122 3,301 1,530 158 357 $5,468 $2,722 Cash and cash equivalents Accounts receivable (net) Prepaid expenses Other current assets Total current assets Total current liabilities For the year, net sales were $14,039 and cost of goods sold was $9,058 (in millions) Compute the four liquidity ratios at the end of the year. (Round answers to 1 decimal place, e.g. 1.6 Current ratio Acid-test ratio Accounts receivable turnover Inventory turnover times times

Solution

ans 1 end of the year Current Ratio Current Assets / 2.0 Current Liabilities 6894/3424 ans 2 Acide Ratio Cash and Accounts receivable/Current liabilities 1.4 (1352+3460)/3424 3) Accounts Receivable Turnover ratio 4.2 Sales/Avg Accounts rec 14039/((3460+3301)/2) ans 4 Inventory Turnover 5.9 times COGS/Avg Inventory 9058/((1527+1530)/2) If any doubt please comment. If satisfied you can rate