QUES 5 The financial statements of National News Inc. include the following items:
Year
Year
5
6
7
Balance Sheet:
8
9
10
Cash
11
$ 17,000
$ 22,000
12
13
14
Short-term investments
11,000
26,000
15
16
17
18
Net receivables
64,000
73,000
19
20
21
22
Inventory
77,000
71,000
23
24
25
26
Prepaid expenses
-16,000
-8,000
27
28
29
30
Total current assets
31
$185,000
$200,000
32
33
34
35
Total current liabilities
$111,000
$91,000
36
37
38
39
Income Statement:
40
41
Net credit sales
$654,000
42
43
44
45
Cost of goods sold
46
327,000
47
48
49
56
57
58
59
60
61
62
Compute the following ratios for the current year:
Current ratio
Quick (acid-test) ratio
Inventory turnover
Accounts receivable turnover
Days' sales in receivable
63