West Highland Clothiers reported the following items at August 31, 2012 (amounts in thousands, with last year’s—2011—amounts also given as needed):

Requirement
1. Compute West Highland’s (a) acid-test ratio and (b) days’ sales in average receivables for 2012. Evaluate each ratio value as strong or weak. West Highland sells on terms of net 30.

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Accounts payable Cash 250 $ 380 Accounts receivable, net: August 31, 2012 $ 220 Inventories August 31, 2011 110 August 31, 2012 260 Cost of goods sold 1,160 August 31, 2011 220 Short-term investments 170 Net sales revenue 2,555 Other current assets 50 Long-term assets 360 Other current liabilities 160 -term liabilities 80