Question
The comparative financial statements of Suffolk Cosmetic Supply for 2024, 2023, and 2022 include the data shown here: Data table 2024 2023 2022 Balance sheetpartial
The comparative financial statements of Suffolk Cosmetic Supply for 2024, 2023, and 2022 include the data shown here:
Data table
|
| 2024 | 2023 | 2022 |
| Balance sheetpartial | |||
| Current Assets: | |||
| Cash | $80,000 | $70,000 | $65,000 |
| Short-term Investments | 120,000 | 160,000 | 155,000 |
| Accounts Receivable, Net | 265,000 | 250,000 | 255,000 |
| Merchandise Inventory | 330,000 | 325,000 | 315,000 |
| Prepaid Expenses | 45,000 | 30,000 | 55,000 |
| Total Current Assets | 840,000 | 835,000 | 845,000 |
| Total Current Liabilities | 540,000 | 615,000 | 655,000 |
| Income statementpartial | |||
| Net Sales (all on account) | 5,860,000 | 5,120,000 | 4,200,000 |
| 1. | Compute these ratios for 2024 and 2023: | |
| a. | Acid-test ratio (Round to two decimals.) | |
| b. | Accounts receivable turnover (Round to two decimals.) | |
| c. | Days' sales in receivables (Round to the nearest whole day.) | |
| 2. | Considering each ratio individually, which ratios improved from 2023 to 2024 and which ratios deteriorated? Is the trend favorable or unfavorable for the company? | |
.
Question content area bottom
Requirement 1a. Compute the acid-test ratio for 2024 and 2023. (Round to two decimals.) (Abbreviations used: Cash = Cash including cash equivalents; ST invest. = short-term investments. Round the acid test ratios to two decimals, X.XX.)
|
| (Cash + ST invest. + Net current receivables) | Total current liabilities | = | Acid-test ratio | |
| 2024 |
|
| = |
| |
| 2023 |
|
| = |
|
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