Big Game Inc. operates gaming stores across the country. Selected comparative financial statement data are shown below

 

Instructions 

a. Calculate the following liquidity ratios for 2024 and 2023. 

1. Current ratio 

2. Acid-test ratio 

3. Receivables turnover

4. Collection period

5. Inventory turnover 

6. Days sales in inventory  

7. Operating cycle 

b. Indicate whether each of the liquidity ratios calculated in part (a) is better or worse in 2024.

Transcribed Image Text:

Current assets Cash BIG GAME INC. Balance Sheet (partial) December 31 (in millions) 2024 Short-term investments Accounts receivable Inventory Prepaid expenses Total current assets Total current liabilities Additional information: (in millions) Net credit sales Cost of goods sold $ 795 55 676 898 41 $2,465 $1,890 2024 $8,258 5,328 2023 $ 91 60 586 525 52 $1,314 $825 2023 $3,940 2,650 2022 $ 60 40 496 575 29 $1,200 $ 750