The financial statements of Big City News, Inc., include the following items:

1. Using Exhibit 13-8 as a model, compute the following ratios for 2014 and 2013:
a. Current ratio
b. Quick (acid-test) ratio
c. Inventory turnover and days’ inventory outstanding (DIO)
d. Accounts receivable turnover
e. Days’ sales in average receivables or days’ sales outstanding (DSO)
f. Accounts payable turnover and days’ payable outstanding (DPO). Use cost of goods sold in the formula for accounts payable turnover
g. Cash conversion cycle (in days) (When computing days, round your answer to the nearest whole number.)
2. Evaluate the company’s liquidity and current debt-paying ability for 2014. Has it improved or deteriorated from 2013?
3. As a manager of this company, what would you try to improve nextyear?

  • CreatedJuly 25, 2014
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