Computing five ratios The financial statements of Paramour News, Inc., include the following items: Balance Sheet:...

 

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Computing five ratios The financial statements of Paramour News, Inc., include the following items: Balance Sheet: Cash Short-term investments ............ Net receivables Inventory....... Prepaid expenses..... Total current assets. Total current liabilities.. Income Statement: Sales revenue Cost of goods sold Requirement Compute the following ratios for the current year: a. Current ratio b. Acid-test ratio c. Receivable collection period Current Year Preceding Year $ 52,000 28,000 100,000 188,000 18,000 386,000 258,000 $980,000 548,000 $ 64,000 40,000 146,000 152,000 16,000 418,000 192,000 d. Inventory resident period e. Payable outstanding period f. Cash conversion cycle Computing five ratios The financial statements of Paramour News, Inc., include the following items: Balance Sheet: Cash Short-term investments ............ Net receivables Inventory....... Prepaid expenses..... Total current assets. Total current liabilities.. Income Statement: Sales revenue Cost of goods sold Requirement Compute the following ratios for the current year: a. Current ratio b. Acid-test ratio c. Receivable collection period Current Year Preceding Year $ 52,000 28,000 100,000 188,000 18,000 386,000 258,000 $980,000 548,000 $ 64,000 40,000 146,000 152,000 16,000 418,000 192,000 d. Inventory resident period e. Payable outstanding period f. Cash conversion cycle

Answer rating: 100% (QA)

To compute the requested ratios for Paramour News Inc for the current year well use the given financ... View the full answer