Question

Sales for the year totaled $600,000. The company president believes the company carries excess inventory. She would like the inventory turnover ratio to be 8´ and would use the freed up cash to reduce current liabilities. If the company follows the president's recommendation and sales remain the same, the new quick ratio would be:
Naib Corp. has the following simplified balance sheet:
Cash.......... $ 50,000 Current liabilities ..... $125,000
Inventory ........ 150,000
Accounts receivable .... 100,000 Long-term debt ....... 175,000
Net fixed assets ..... 200,000 Common equity ...... 200,000
Total .......... $500,000 Total ........... $500,000



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  • CreatedJuly 26, 2013
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