Q.1 Following is selected financial data for following companies at the end of year:

Xli Gli

Net Credit Sales 600,000 500,000

Cost of goods sold 500,000 450,000

Cash 50,000 35,000

Average Account Receivable 70,000 65,000

Average Inventory 90,000 70,000

Current Liabilities 100,000 120,000

1. For each of the two companies, compute the following ratios:

1. Working Capital Ratio
2. Quick Ratio
3. Inventory Turnover
4. Number of Days sales in account receivable

2. Comment on the quality of each companys liquidity position based on the results obtain from above ratios which are applicable.