Liquidity Analysis

The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations:

Beginning balances:

Inventory $200,000

Accounts receivable 300,000

Ending balances:

Inventory $250,000

Accounts receivable 400,000

Cash 100,000

Marketable securities (short-term) 200,000

Prepaid expenses 50,000

Accounts payable 175,000

Taxes payable 85,000

Wages payable 90,000

Short -term loans payable 50,000

During the year, Arn had net sales of $2.45 million. The cost of goods sold was $1.3 million.

Note: Round al answers to two decimal places. .

1.Compute the current ratio.

2.Compute the quick or acid-test ratio.

3. Compute the accounts receivable turnover ratio.

4. Compute the accounts receivable turnover in days.

5.Compute the inventory turnover ratio.

6. Compute the inventory turnover in days.