EBK CFIN
6th Edition
ISBN: 9781337671743
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 2, Problem 7PROB
Summary Introduction
To determine: Current Liabilities and Inventory
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V. Direction: Solve the following problems using financial ratios. Write the answer on the blank.
1. Current assets is P20,000, current liabilities is P30,000. What is the current ratio?
2. Inventory is P15,000; Accounts Payable is P45,000. Cash and accounts receivable total P8,000.
What is the current ratio?
What is the quick ratio?
3. If current ratio is 1.5, what is the total accounts receivable if cash is P220,000, inventory is P75,000,
and accounts payable is P330,000?
4. Cash is 30% of total current assets. If current ratio is 2.5, what is the new current ratio if total non-
cash current assets grow by 50%?
5. The total asset is P1,500,000. Sales is P4,500,000. What is the asset turnover?
6. Accounts receivable turnover is 8. What is the average collection period assuming annual data
What is the average collection period if quarterly data are used?
are used?
7. Sales for the year amount to P3,000,000, Accounts receivable is P360,000. What is the average
collection period assuming…
Credit Card of America (CCA) has a current ratio of 3.5 and a quick ratio of 3.0. If its total current assets equal $73,500, what are CCA’s
(a)current liabilities and
(b)inventory?
Compute the Quick ratio if Current Assets: 10.354; Current Liabilities: 6.615; Inventory: 5.767; Cash: 1.013.
a) 0.69 times
b) 0.75 times
c) 0.72 times
d) 0.15 times
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- 1. Current assets is P20,000, current liabilities is P30,000. What is the current ratio? 2. Inventory is P15,000; Accounts Payable is P45,000. Cash and accounts receivable total P8,000. What is the current ratio? What is the quick ratio? 3. If current ratio is 1.5, what is the total accounts receivable if cash is P220,000, inventory is P75,000, and accounts payable is P330,000? 4. Cash is 30% of total current assets. If current ratio is 2.5, what is the new current ratio if total noncash current assets grow by 50%? 5. The total asset is P1,500,000. Sales is P4,500,000. What is the asset turnover?arrow_forwardFind the following using the data bellow Accounts receivable = 111,100,000 Current assets = 316,500,000 Total assets = 600,000,000 A. Return on assets B. Common equity C .Quick ratioarrow_forward1. If current assets amounted to P600,000 and current liabilities amounted to P200,000, what is the current ratio of the entity? *a. P800,000b. P400,000c. 3d. 1/3 3. If net sales is P200,000 and the average accounts receivable is P50,000, what is the accounts receivable turnover ratio? *a. 4b. 1/4c. P150,000d. P250,000 5. If total assets amounted to P800,000 and total liabilities amounted to P200,000, what is the debt to equity ratio? *a. 4b. 0.3333c. 0.25d. 3arrow_forward
- Compute the Quick ratio if Current Assets: 11.436; Current Liabilities: 5.414; Inventory: 4.456; Cash: 2.024.arrow_forwardWe are given the following information for Pettit Corporation. Sales (credit) Cash Inventory Current liabilities Asset turnover Current ratio Debt-to-assets ratio Receivables turnover $2,068,000 150,000 923,000 763,000 a. Accounts receivable b. Marketable securities c. Capital assets. d. Long-term debt $ Current assets are composed of cash, marketable securities, accounts receivable, and inventory. Calculate the following balance sheet items: LA LA LA $ $ 1.00 times 2.60 times $ 40 % 4 times 517000arrow_forwardBased upon the information given below, calculate the following: Current ratio Acid test Accounts receivable turnover ratio Cash ratio Inventory turnover EPS Total asset turnover Debt ratio Debt-to-equity ratio Times interest earned ROI Net profit margin ROE Market price/Book value P/E BALANCE SHEET ASSETS LIABILITIES & STOCKHOLDERS EQUITY Cash $ 1,500 Accounts payable $12,500 Marketable securities 2,500 Notes payable 12,500 Accounts receivable 15,000 Total current liabilities…arrow_forward
- 1. Compute the following ratios for the comparative periods (2018 and 2019). The company used 365 days in its computation for some of the ratios. Show your solution. d. Accounts Receivable Turnover Ratio e. Average Collection Period f. Inventory Turnover Ratio g. Average Days in Inventory h. Number of days in Operating Cycle i. Debt to Total Assets Ratio j. Debt to Equity Ratio k. Times Interest Earned Ratio l. Gross Profit Ratio m. Profit Margin Ratio n. Return on Assets o. Return on Equity p. Assets Turnover Ratioarrow_forwardBased upon the information given below, calculate the following: Current ratio Acid test Accounts receivable turnover ratio Cash ratio Inventory turnover EPS Total asset turnover Debt ratio Debt-to-equity ratio Times interest earned ROI Net profit margin ROE Market price/Book value P/E Average Collection Period BALANCE SHEET ASSETS LIABILITIES & STOCKHOLDERS EQUITY Cash $ 1,500 Accounts payable $12,500 Marketable securities 2,500 Notes payable 12,500 Accounts receivable 15,000 Total…arrow_forwardFollowing are the financial statements of AB Ltd. for 2010. From the aforementioned table, calculate the following: 1. Current ratio 2. Liquid ratio 3. Receivables turnover ratio and collection period 4. Inventory turnover and holding period 5. Fixed assets turnover 6. Total assets turnover 7. Debt ratio 8. D/E ratio 9. Interest coverage ratio 10. PAT margin 11. ROA 12. ROE 13. EPS 14. D/P ratio 15. P/E ratio 16. Book value per sharearrow_forward
- 5. Compute the following financial ratios for 2015 and 2016 and interpreting the results in the image attached: (1 decimal place) a. current ratio b. quick ratio c. receivable turnover d. age of receivables e. inventory turnover f. age of inventory g. asset turnover h. fixed asset turnover i. times interest earned j. debt ratio k. equity ratio l. debt to equity ratio m. gross profit margin n. return on equity o. return on assetsarrow_forwardWhich of the following is included in the numerator of the Acid-Test Ratio calculation (check all that apply) A. Supplies B. Net Current Receivables C. Short-Term Investments D. Merchandise Inventory Which of the following ratios helps measure a company's ability to pay its current liabilities? (check all that apply) A. Accounts Receivable Turnover B. Days' Sales in Inventory C. Acid Test Ratio D. Cash Ratioarrow_forwardSelect the Income Statements and Balance Sheets of Aramco Saudi from the calculate the following financial ratios: a. Long-term debt ratios b. Total debt ratio c. Times interest earned d. Cash coverage ration e. current ratio f. Quick ratio g. Operating profit margin h. Inventory Turnover i. Days in inventory j. Average collection period k. Return on equity I. Return on assets m. Payout rationsarrow_forward
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