Swenson Corporation reported the following items at December 31, 2018, and 2017:

Requirements

1. Compute the company’s (a) quick (acid-test) ratio and (b) days’ sales outstanding for 2018. Evaluate each ratio value as strong or weak. All sales are on account with terms of net 30 days.

2. Recommend two ways for Swenson to speed up its cash flow from receivables.

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A1 Balance Sheets (Summarized) 2 Year-end Year-end 2018 2017 2017 2018 4 5 Current assets: Cash Marketable securities Accounts receivable, net Inventory Current liabilities: Accounts payable Other current liabilities $ 12,000 $ 8,000 23,000 55,000 191,000 2,000 $ 18,000 $ 19,500 105,000 107,000 20,000 21,000 12,000 69,000 Long-term liabilities 187,000 2,000 Stockholders' equity 10,000 Other current assets 140,000 140,500 10 11 Long-term assets 12 Total assets 13 $ 283,000 $ 288,000 Total liabilities and equity $ 283,000 $ 288,000 14 Income statement (partial): 15 Sales Revenue 16 2018 $ 868,000