Current ratio, quick ratio, inventory turnover, accounts receivable turnover, and days’ sales in accounts receivable (Learning Objective 2)

15–20 min.

The following information pertains to Al Baraka Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit. Compute:

(a) current ratio,

(b) quick ratio,

(c) accounts receivable turnover,

(d) inventory turnover,

(e) gross profit percentage, and

(f) net income percentage.

Assets Cash and Short-term Investments ......................................................

Accounts Receivable (net) ..................................................................

Inventory.............................................................................................

Property, Plant, and Equipment ..........................................................

Total Assets ........................................................................................

Liabilities and Stockholders’ Equity Current Liabilities................................................................................

Long-term Liabilities ...........................................................................

Stockholders’ Equity—Common.........................................................

Total Liabilities and Stockholders’ Equity............................................

Income Statement Sales Revenue.....................................................................................

Cost of Goods Sold .............................................................................

Gross Profit.........................................................................................

Operating Expenses ............................................................................

Net Income .........................................................................................

$ 45,000 30,000 15,000 210,000

$300,000

$ 60,000 90,000 150,000

$300,000

$121,000 66,000 55,000 30,000

$ 25,000.

AppendixLO1