The comparative financial statements of

Paradise

Cosmetic Supplies Ltd. for

2018

and

2017

include the following select data:

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Requirement 1:

Compute these ratios for

2018

and

2017:

a.	Current ratio
b.	Acid-test ratio
c.	Settlement period for trade receivables

Requirement 2:

Which ratios improved from

2017

to

2018

and which ratios deteriorated? How does this trend affect the company?

Question content area bottom

Part 1

Requirement 1:

a. Calculate the current ratio. (Round your final answer to 2 decimal places. If an answer is less than 1, place a '0' in front of the decimal point.)

		2018	2017
Current ratio	=	enter your response here:1	enter your response here:1

Part 2

b. Calculate the acid-test ratio. (Round your final answer to 2 decimal places. If an answer is less than 1, place a '0' in front of the decimal point.)

		2018	2017
Acid-test ratio	=	enter your response here:1	enter your response here:1

Part 3

c. Next calculate the settlement period for trade receivables. (Round all calculations to the nearest complete day. Use year end figures for consistency)

		2018	2017
Settlement period for trade receivables	=	enter your response here days	enter your response here days

Part 4

Requirement 2:

The three ratios

improved

deteriorated

stayed the same

from

2017

to

2018.

This trend

does not impact on

is unfavourable for

is favourable for

the company.

Ba es na ns More info Statement of financial position Current assets: Inventories Trade receivables Loans Bank Cash Total current assets Total current liabilities Statement of income Revenue Print (000) (000) 2018 2017 370 345 290 270 55 15 80 70 150 165 945 865 590 610 5,860 5,130 Done