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During the past year, the company introduced several new product lines and raised the selling prices on a number of old product lines in order
During the past year, the company introduced several new product lines and raised the selling prices on a number of old product lines in order to improve its profit margin. The company also hired a new sales manager, who has expanded sales into several new territories. Sales terms are 3/10, n/30. All sales are on account Required: 1. To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year a nd last year a. The amount of working capital. Working capital 5 792,000 677,000 b. The current ratio. (Round your answers to 2 decimal places.) Current ratio 2.06 2.54 c. The acid-test ratio. (Round your answers to 2 decimal places.) Acid-test ratio 0.75 d. The average collection period. (The accounts receivable at the beginning of last year totaled 5260,000.) (Round your intermediate calculations and final answers to 1 decimal place. Use 365 days in a year.) Average collection period days days The average sale period. (The inventory at the beginning of last year totaled $510,000.) (Round your intermediate calculations and final answers to 1 decimal place. Use 365 days in a year.) e. ast Average sale period days days
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