Topple Co has the following projected figures for its first year of operations:
1. Sales $3,600,000
2. Purchasing expense $3,000,000
3. Average accounts receivable $306,000
4. Average inventory $495,000
5. Average accounts payable $230,000
6. Average overdraft $500,000
7. Gross profit margin 25%.
8. Average industry data:
9. Days of inventory 53
10. Accounts receivable days 23
11. Days payable 47
12. Current ratio 1.43
13. Assume there are 365 days in the year.

 

REQUIRED:
Calculate and comment on the cash operating cycle, current ratio, quick ratio, and sales to working capital ratio of Topple Co.

Answer rating: 100% (QA)

Financial Ratios of Topple Co 1 Cash Operating Cycle The cash operating cycle measures the time it takes for a company to convert its investment in inventory and receivables into cash from sales We ca... View the full answer