Armada Company has these comparative balance sheet data:

ARMADA COMPANY

Balance Sheets

December 31,

2017 2016

Cash $ 40,000 $ 30,000

Accounts receivable (net) 65,000 60,000

Inventory 60,000 50,000

Plant assets (net) 185,000 180,000

$350,000 $320,000

Accounts payable $ 50,000 $ 60,000

Mortgage payable (15%, due in 15 years) 100,000 100,000

Common stock, $10 par 140,000 120,000

Retained earnings 60,000 40,000

$350,000 $320,000

Additional information for 2017:

1. Net income was $25,000.

2. Sales on account were $450,000. Sales returns and allowances amounted to $25,000.

3. Cost of goods sold was $275,000.

4. Net cash provided by operating activities was $49,000.

5. Capital expenditures were $23,000, and cash dividends were $18,000.

Instructions

Compute the following ratios at December 31, 2017.

(a) Current. (e) Days in inventory

(b) Accounts receivable turnover. (f) Free cash flow.

(c) Average collection period.

(d) Inventory turnover.