The income statement for Ugg Company for the year ending 30 June 2013 is detailed below:

The operating expenses include $17 500 of interest expense.
The following amounts have been extracted from the company's balance sheet at 30 June 2013:

Required
a. Calculate and interpret the following:
(i) Days inventory turnover
(ii) Days debtors
(iii) Current ratio
(iv) Quick asset ratio
b. Report on what these ratios reveal about Ugg Company.

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Sales revenue Cost of sales Gross profit Operating expenses Profit $425 000 325 000 100000 60000 40000 Accounts receivable Prepaid expenses Cash Inventory Bank overdraft Accounts payable Accrued expenses $62500 5000 7500 37 500 6 500 40 000 3 000