5.Computation of selected ratios.

The following data is given:

December 31,

20162015

Cash$68,000$50,000

Accounts receivable (net)70,00060,000

Inventories90,000130,000

Plant assets (net)383,000325,000

Accounts payable60,00040,000

Salaries and wages payable10,0005,000

Bonds payable70,00070,000

10% Preferred stock, $40 par100,000100,000

Common stock, $10 par120,00090,000

Paid-in capital80,00065,000

Retained earnings170,000175,000

Net credit sales800,000

Cost of goods sold600,000

Net income80,000

Instructions

Compute the following ratios:

(a)Acid-test ratio at 12/31/16

(b)Receivables turnover in 2016

(c)Inventory turnover in 2016

(d)Profit margin on sales in 2016