Swenson Corporation reported the following items at December 31, 2021, and 2020:

Requirements

1. Compute the company’s 

(a) Quick (acid-test) ratio 

(b) Days’ sales outstanding for 2021.

Evaluate each ratio value as strong or weak. All sales are on account with terms of net 30 days.

2. Recommend two ways for Swenson to speed up its cash flow from receivables.

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1 2 A1 9 10 Balance Sheets (Summarized) 3 4 5 6 7 Marketable securities 8 Accounts receivable, net Inventory Other current assets Current assets: Cash 11 Long-term assets 12 Total assets 13 14 Income statement (partial): 15 Sales Revenue 16 Year-end 2021 2020 $ 12,000 $8,000 23,000 55,000 191,000 2,000 2021 $868,000 Year-end 2021 Current liabilities: Accounts payable 12,000 Other current liabilities 69,000 Long-term liabilities 187,000 2,000 Stockholders' equity 140,000 140,500 10,000 $ 283,000 $288,000 Total liabilities and equity $ 283,000 $ 288,000 2020 $ 18,000 $ 19,500 105,000 107,000 20,000 21,000