1 -Given the following information, compute the current and quick ratios:

Cash

$100,000

Accounts receivable

357,000

Inventory

458,000

Current liabilities

498,000

Long-term debt

610,000

Equity

598,000

Answer

2-If a firm has sales of $25,689,000 a year, and the average collection period for the industry is 45 days, what should this firm's accounts receivable be if the firm is comparable to the industry?

3- ABCD Corporation has credit sales of $10,640,000 and receivables of $1,520,000.

a.What is the receivables turnover?

b.What is the average collection period (days sales outstanding)?

1. If the company offers credit terms of 30 days, are its receivables past due

4- A firm with sales of $500,000 has average inventory of $200,000. The industry average for inventory turnover is four times a year. What would be the reduction in inventory if this firm were to achieve a turnover comparable to the industry average?

5- A firm's balance sheets for the last two years are as follows: