Short-Term Liquidity Ratios. Refer to the condensed income statement for CarMax, Inc., in Exercise 20 and to the company's balance sheet in Exercise 22.

Required:

Compute the following short-term liquidity ratios for 2019, and provide a brief explanation after each ratio (round computations to two decimal places):

1. Current ratio
2. Quick ratio
3. Receivables turnover ratio and average collection period (assume all sales are on account)
4. Inventory turnover ratio and average sale period

exercise 20 carman, Inc

SALES AND OPERATING REVENUES:	2019	2018
REVENUES	20,319,987	18,173,100
TOTAL COST OF SALES	17,597,647	15,692,509
GROSS PROFIT	2,722,340	2,480,591
CARMAX AUTO FINANCE INCOME	456,030	438,690
Selling, general and
administrative expenses	1,940,067	1,730,275
Interest expense	83,007	75,792
Other (income) expense	(5,690)	408
Earnings before income taxes	1,160,986	1,112,806
Income tax provision	272,553	270,393
NET EARNINGS	$ 888,433	$ 842,413

exercise 22 balance sheet

ASSETS
CURRENT ASSETS:	2019	2018
Cash and cash equivalents	$ 58,211	$ 46,938
Restricted cash from collections on auto loans receivable	481,043	440,669
Accounts receivable, net	191,090	139,850
Inventory	2,846,416	2,519,455
Other current assets	86,927	67,101
TOTAL CURRENT ASSETS	3,663,687	3,214,013
Auto loans receivable, net	13,551,711	12,428,487
Property and equipment, net	3,069,102	2,828,058
Deferred income taxes	89,842	61,346
Operating lease assets	449,094	-
Other assets	258,746	185,963
TOTAL ASSETS	$ 21,082,182	$ 18,717,867
CURRENT LIABILITIES:
Accounts payable	$ 737,144	$ 593,171
Accrued expenses and other current liabilities	331,738	318,204
Accrued income taxes	1,389	3,784
Current portion of operating lease liabilities	30,980	-
Short-term debt	40	1,129
Current portion of long-term debt	9,251	10,177
Current portion of non-recourse notes payable	424,165	385,044
TOTAL CURRENT LIABILITIES	1,534,707	1,311,509
Long-term debt, excluding current portion	1,778,672	1,649,244
Non-recourse notes payable, excluding current portion	13,165,384	12,127,290
Operating lease liabilities, excluding current portion	440,671	-
Other liabilities	393,873	272,796
TOTAL LIABILITIES	17,313,307	15,360,839
Common Stock	81,541	83,739
Capital in excess of par value	1,348,988	1,237,153
Accumulated other comprehensive loss	(150,071)	(68,010)
Retained earnings	2,488,417	2,104,146
TOTAL SHAREHOLDERS' EQUITY	3,768,875	3,357,028
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 21,082,182	$ 18,717,867