The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: Beginning balances:
Inventory $200,000
Accounts receivable 300,000
Ending balances:
Inventory $250,000
Accounts receivable 400,000
Cash $100,000
Marketable securities (short-term) 200,000
Prepaid expenses 50,000
Accounts payable 175,000
Taxes payable 85,000
Wages payable 90,000
Short-term loans payable 50,000
During the year, Arnn had net sales of $2.45 million. The cost of goods sold was $1.3 million.
Required:
When required, round your answers to two decimal places. Assume 365 days per year.
1. Compute the current ratio.
2. Compute the quick or acid-test ratio.
3. Compute the accounts receivable turnover ratio.
times
4. Compute the accounts receivable turnover in days.
days
5. Compute the inventory turnover ratio.
times
6. Compute the inventory turnover in days.
days