The comparative financial statements of Apple-way Flowers, Inc., for 2016, 2015, and 2014 include the following selected data:

Requirements
1. Compute these ratios for 2016 and 2015:
a. Quick ratio
b. Current ratio
c. Accounts receivable turnover; assume all sales are credit sales
d. Receivable collection period; use 365 days
2. Write a memo explaining to the company owner which ratios improved from 2015 to 2016, which ratios deteriorated, and which items in the financial statements changed and caused changes in some ratios. Discuss whether this change conveys a favorable or an unfavorable impression about the company?

Transcribed Image Text:

2016 2016 2014 Balance Sheet Current Assets: $ 18,500 $ 10,300 $ 5,500 11,600 Cash 23,300 12,400 Short-term Investments Receivables, Net Inventory Prepaid Expenses 24,900 42,500 2,600 100,100 29,700 43,300 3,200 31,400 30,600 3,600 Total Current Assets 98,900 94,400 $ 65,700 | $ 67,300 $ 62,600 Total Current Liabilities Income Statement $483,700 $471,900 $ 468,800 267,400 Sales Revenue Cost of Goods Sold 278,100 261,300