Cherokee Carpets reported the following amounts in its 2009 financial statements. The 2008 figures are given for comparison.

Requirements 

1. Determine whether Cherokee's acid-test ratio improved or deteriorated from 2008 to 2009. How does Cherokee's acid-test ratio compare with the industry average of 0.80 ?

2. Compare the days' sales in receivables for 2009 with Cherokee's credit terms of net 30.

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2009 2008 Current assets: Cash........ $ 3,000 Short-term investments. 23,000 $ 10,000 11,000 Accounts receivable........ $60,000 $74,000 Less: Allowance for uncollectibles........... (7,000) $3,000 (6,000) 68,000 Inventory 192,000 189,000 Prepaid insurance Total current assets...... Total current liabilities Net sales........... 2,000 2,000 $273,000 $280,000 $104,000 $107,000 $730,000 $732,000