7-12 Comprehensive Ratio Calculations The Kretovich Company had a quick ratio of 1.4, a current ratio of 3.0, a days sales outstanding of 36.5 days (based on a 365-day year), total current assets of $810,000, and cash and marketable securities of $120,000. What were Kretovich's annual sales? QUESTION 3 Chapter 7 - Problem 12: Change the value of cash and marketable securities in cell C8 from $120,000 to $150,000. Record the new calculated value of annual sales visible in cell C26 in the space provided. [Format the value as a number with no decimal places. For example, 1234567] A B C D E F G H J 2 4 5 1 Problem 7-12 2 3 INPUT Quick ratio 1.40 X 5 Current ratio 3.00 X 6 Days sales outstanding 36.5 days (365 days/year) 7 Current assets $ 810,000 8 Cash and marketable securities $ 150,000 9 OUTPUT 11 The only ratio containing sales is the days sales outstanding. You must solve for accounts receivable first to be able to compute annual sales. 12 You are given CA and the current ratio so you are able to solve for the CL 14 Current liabilities B 10 13 15 16 17 18 You are given CA and the quick ratio and you just found CL, so you can solve for inventory Inventory 19 20 21 You are given CA and cash and marketable securities. With the solution for inventory you can solve for accounts receivable Cash and marketable securities Accounts receivable you are solving for this value Inventory Total current assets 22 23 24 25 Finish your calculations using DSO and the value you have calculated for accounts receivable Annual sales 26 27