The financial statements of Victor’s Natural Foods

Price: $2.99


E15-17 Computing six key ratios [10–15 min]
The financial statements of Victor’s Natural Foods include the following items:

Current Year
Preceding Year
Balance sheet:
Cash . . . . . . . . . . . . . . . 15,000 20,000
Short-term investments 11,000 27,000
Net receivables . . . . .. . 54,000 73,000
Inventory . . . . . . . . .. . 77,000 69,000
Prepaid expenses . . .. . 15,000 9,000
Total current assets .. . 172,000 198,000
Total current liabilities .133,000 93,000
Income statement:
Net credit sales . . . . . . .462,000
Cost of goods sold . . . .315,000

Requirement
1. Compute the following ratios for the current year:
Current ratio
Acid-test ratio
Inventory turnover
Days in inventory
Days’ sales in receivables
Gross profit percentage