Question: Using the provided data, calculate: Working Capital Current Ratio Quick Ratio Inventory Turnover Ratio Days Sales in Inventory (DSI) Table: YZA Ltd. Financial Data (in

Using the provided data, calculate:

  1. Working Capital
  2. Current Ratio
  3. Quick Ratio
  4. Inventory Turnover Ratio
  5. Days Sales in Inventory (DSI)

Table: YZA Ltd. Financial Data (in $ thousands)

Account

Amount

Current Assets

300,000

Inventories

100,000

Current Liabilities

150,000

Cost of Goods Sold

800,000

Average Inventory

80,000


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YZA Inc. has the following data:

Cash: $20,000 Accounts Receivable: $15,000 Inventory: $25,000 Accounts Payable: $10,000 Notes Payable: $12,000 Equipment: $50,000 Accumulated Depreciation: $15,000 Common Stock: $30,000 Retained Earnings: $33,000

Requirements:

  1. Prepare a classified balance sheet.
  2. Calculate the current ratio and quick ratio.
  3. Analyze the financial position of YZA Inc.
  4. Prepare adjusting entries for the following:
    • Depreciation expense: $3,000
    • Bad debts expense: $1,500
  5. Discuss the significance of liquidity ratios in financial analysis.

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