Case 3 The following selected information is taken from the financial statements of a company for its most recent year of operations: Beginning balances: Inventory Accounts Receivable Ending Balances: Inventory Accounts Receivable Cash Marketable securities (short-term) Prepaid Expenses Accounts Payable Taxes Payable Wages Payable Short-term Loans Payable $ 200,000 300,000 $ 250,000 400,000 100,000 200,000 50,000 175,000 85,000 90,000 50,000 During the year, Arnn had: Net Sales $ 2,450,000 COGS 1,300,000 Example ratio calculation: 1. Compute the Times-Interest-Earned ratio. Interest Expense Income Before Taxes Calculation label: Calculation: Calculation label: Calculation: Answer label: $ 1,500.00 $ 400,000.00 =Income Before Taxes+Interest Expense $ 401,500.00 =Interest Expense $ 1,500.00 =(Income Before Taxes+Interest Expense)/Interest Expense 007.07 Calculation label: Calculation: Calculation label: Calculation: Answer label: |=Income Before Taxes+Interest Expense $ 401,500.00 =Interest Expense $ 1,500.00 =(Income Before Taxes+Interest Expense)/Interest Expense 267.67 Answer: Required: Note: Round all intermediary calculations and final answers to two decimal places and format as either a number or dollar amount (whichever is appropriate). To receive full points, you must show your work and label the amounts used in your calculations. Use an apostrophe ' at the beginning of a calculation label to keep it from showing a #NAME? error. This shows the text you have written (see my calculation label in 1. Compute the Current ratio. Calculation label: Calculation: Calculation label: Calculation: Answer label: Answer: = = 2. Compute the Quick or Acid-Test Ratio: Calculation label: Calculation: Calculation label: Calculation: Answer label: Answer: = 2. Compute the Quick or Acid-Test Ratio: Calculation label: Calculation: Calculation label: Calculation: Answer label: Answer: = = = 3. Compute the Accounts Receivable Turnover: Calculation label: Calculation: Calculation label: Calculation: Answer label: Answer: = = = 4. Compute the Accounts Receivable Turnover in Days: Calculation label: Calculation: Calculation label: Calculation: Answer label: Answer: = = = 76 77 5. Compute the Inventory Turnover: 78 Calculation label: 79 Calculation: 80 Calculation label: 81 Calculation: 82 Answer label: 83 Answer: 84 85 86 6. Compute Inventory Turnover in Days: 87 Calculation label: 88 Calculation: 89 Calculation label: 90 Calculation: 91 Answer label: 92 Answer: 93 94 95 96 97 98 99 = = = = = =