Algonquin, Inc., reported the following items at December 31, 2012, and 2011: Requirements 1. Compute Algonquins (a)
Question:
Requirements
1. Compute Algonquins (a) quick (acid-test) ratio and (b) days sales in average receivables for 2012. Evaluate each ratio value as strong or weak. Algonquin sells on terms of net 30 days.
2. Recommend two ways for Algonquin to speed up its cash flow fromreceivables.
Transcribed Image Text:
Balance Sheets (Summarized) Year End Year End 2012 2011 2012 2011 Current assets: Current liabilities: Cash Marketable securities Accounts receivable, net Inventory Other current assets S 6,000 12,000 Accounts payable 15,00016,500 107,000 109,000 15,000 16,000 22,00011,000Other current liabilities 56,00070,000 Long-term liabilities 193,000 189,000 3,000 3,000 Stockholders' equity 143,000143,500 Long-term assets Total assets S280,000 $285,000 Total liabili ties and equity $280,000 $285,000 Income Statement (partial): 2012 Sales revenue $728,000
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Related Book For
Financial accounting
ISBN: 978-0132751124
9th edition
Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom
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