Question: Question 7 [7 x 2 = 14 Marks] The financial statements of Susan's Natural Food include the following items: Details Current Year ($) Preceding year

Question 7 [7 x 2 = 14 Marks]

The financial statements of Susan's Natural Food include the following items:

Details Current Year ($) Preceding year ($)
Cash 15000 20000
Short term investments 11000 27000
Accounts receivables 54000 73000
Inventory 77000 69000
Prepaid expenses 15000 9000
Total current assets 172000 198000
Income statement:
Net credit sales 462000
Cost of sales 315000
Note: Current liability $133000 for current year.

Required:

Calculate the following ratios for the current year:

  1. Current ratio
  2. Acid test ratio
  3. Inventory turnover
  4. Days in inventory
  5. Day's sales in accounts receivables
  6. Gross profit margin
  7. Net Working capital

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