Question

Chippewa Carpets reported the following amounts in its 2016 financial statements. The 2015 figures are given for comparison.
Requirements
1. Calculate Chippewa’s acid-test ratio for 2016. (Round to two decimals.) Determine whether Chippewa’s acid-test ratio improved or deteriorated from 2015 to 2016. How does Chippewa’s acid-test ratio compare with the industry average of 0.80?
2. Calculate Chippewa’s accounts receivable turnover ratio. (Round to two decimals.) How does Chippewa’s ratio compare to the industry average accounts receivable turnover of 10?
3. Calculate the days’ sales in receivables for 2016. (Round to the nearest day.) How do the results compare with Chippewa’s credit terms of net 30?


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  • CreatedJune 15, 2015
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