The 2017 and 2018 balance sheets for Smith, Inc., showed net accounts receivable of $14,000 and...

 

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The 2017 and 2018 balance sheets for Smith, Inc., showed net accounts receivable of $14,000 and $24,000; respectively, inventory of $8,500 and $7,300, respectively; and accounts payable of $6,600 and $8,500, respectively. The company's 2018 balance sheet showed cash of $28,000 and current liabilities totaled $32,000. The company's 2018 income statement showed net sales of $94,900 and cost of goods sold of $76,000. Compute the following ratios for 2018: 1. Current ratio 2. Quick ratio 3. Cash conversion cycle (round to whole days) The 2017 and 2018 balance sheets for Smith, Inc., showed net accounts receivable of $14,000 and $24,000; respectively, inventory of $8,500 and $7,300, respectively; and accounts payable of $6,600 and $8,500, respectively. The company's 2018 balance sheet showed cash of $28,000 and current liabilities totaled $32,000. The company's 2018 income statement showed net sales of $94,900 and cost of goods sold of $76,000. Compute the following ratios for 2018: 1. Current ratio 2. Quick ratio 3. Cash conversion cycle (round to whole days)

Answer rating: 100% (QA)

To compute the ratios for 2018 we need to use the following formulas 1 Current Ratio Current Ratio C... View the full answer