Exercise 12-8 Matthias Medical manufactures hospital beds and other institutional furniture. The companys comparative balance sheet and income statement for 2012 and 2013 follow.

Matthias Medical Comparative Balance Sheet As of December 31
		2013		2012
Assets
Current assets
Cash		$380,000		$417,500
Accounts receivable, net		1,023,000		776,400
Inventory		742,000		681,050
Other current assets		381,300		247,050
Total current assets		2,526,300		2,122,000
Property, plant, & equipment, net		8,703,820		8,439,965
Total assets		$11,230,120		$10,561,965
Liabilities and Stockholders Equity
Current liabilities		$3,169,000		$2,846,000
Long-term debt		3,702,700		3,892,600
Total liabilities		6,871,700		6,738,600
Preferred stock, $5 par value		58,950		58,950
Common stock, $0.25 par value		104,600		103,900
Retained earnings		4,194,870		3,660,515
Total stockholders equity		4,358,420		3,823,365
Total liabilities and stockholders equity		$11,230,120		$10,561,965

Matthias Medical Comparative Income Statement and Statement of Retained Earnings For the Year
		2013		2012
Sales revenue (all on account)		$10,177,300		$9,614,000
Cost of goods sold		5,612,000		5,298,700
Gross profit		4,565,300		4,315,300
Operating expenses		2,840,300		2,634,200
Net operating income		1,725,000		1,681,100
Interest expense		300,350		308,650
Net income before taxes		1,424,650		1,372,450
Income taxes (30%)		427,395		411,735
Net income		$997,255		$960,715
Dividends paid
Preferred dividends		29,450		29,500
Common dividends		433,450		413,050
Total dividends paid		462,900		442,550
Net income retained		534,355		518,165
Retained earnings, beginning of year		3,660,515		3,142,350
Retained earnings, end of year		$4,194,870		$3,660,515

Calculate the following liquidity ratios for 2013. (If working capital is negative then enter with a negative sign preceding the number or parenthesis, e.g. -15,000 or (15,000). Round all answers except working capital to 2 decimal places, e.g. 2.55.)

a.	Working capital		$
b.	Current ratio
c.	Acid-test ratio
d.	Accounts receivable turnover			times

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Calculate the following liquidity ratios for 2013. (Round average collection period to 0 decimal place, e.g. 25 and inventory turnover ratio to 2 decimal places, e.g. 5.12. Use 365 days for calculation.)

a.	Average collection period		days
b.	Inventory turnover		times

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Calculate average days to sell inventory for 2013. (Round answer to 0 decimal places, e.g. 25. Use 365 days for calculation.)

Average days to sell inventory

days

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