Current ratio, quick ratio, inventory turnover, accounts receivable turnover, and days’ sales in accounts receivable (Learning Objective 5) 15-20 min.

The financial statements of Hernandez & Sons, Inc., include the following items:

Requirement;

1. Compute the following ratios for the current year:

(a) current ratio,

(b) quick ratio,

(c) inventory turnover,

(d) accounts receivable turnover, and

(e) days’ sales in accounts receivable.

Transcribed Image Text:

Current Year Previous Year Balance Sheet Cash.. $ 27,000 $ 33,000 Short-Term Investments Accounts Receivable, Net. Inventory.. Prepaid Expenses. Total Current Assets. 22,000 28,000 54,000 72,000 65,000 42,000 7,000 9,000 175,000 184,000 Total Current Liabilities 87,500 92,000 Income Statement Net Credit Sales........ 554,800 Cost of Goods Sold.......................1251-555EEE 331,700