The comparative financial statements of Lakeland Cosmetic Supply for 2012, 2011, and 2010 include the data shown here:

Requirements
1. Compute these ratios for 2012 and 2011:
a. Acid-test ratio
b. Days' sales in receivables
c. Accounts receivable turnover
2. Considering each ratio individually, which ratios improved from 2011 to 2012 and which ratios deteriorated? Is the trend favorable or unfavorable for thecompany?

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2011 2010 2012 Balance sheet-partial Current asscts: $ 90,000 $ 70,000 $ 30,000 Cash .. Short-term investments 145,000 290,000 370,000 175,000 260,000 125,000 250,000 Receivables, net 335,000 325,000 Inventories Prepaid expenses 60,000 $ 955,000 $ 560,000 15,000 $ 855,000 $ 600,000 50,000 $ 780,000 $ 690,000 Total current assets Total current liabilities Income statement-partial Sales revenue (all on account) $5,860,000 $5,140,000 $4,200,000