The financial statements of Advent News, Inc., include the following items: (Click the icon to view the financial statements.) Requirements ... Requirement 1. Compute the following ratios for 2020 and 2019. a. Current ratio Select the formula, and then enter the amounts to calculate the current ratio. (Round the ratios to two decimal places.) Current ratio 2020 2019 b. Quick (acid-test) ratio. Select the formula, and then enter the amounts to calculate the acid-test ratio. (Abbreviations used: Avg = average, ST = short-term, and Cash* = cash and cash equivalents. Round the ratios to two decimal places.) )/ Acid-test ratio 2020 ( 2019 ( Data table c. Inventory turnover and days' inventory outstanding (DIO). Begin by selecting the formula, and then enter the amounts to calculate inventory turnover. (Round the ratios to two decimal places.) Inventory turnover 2020 2019 2020 2019 2018 Balance sheet: Cash 39,000 $ 14,000 45,000 22.000 Short-term investments Net receivables 73,000 76,000 50,000 Now, select the formula, and then enter the amounts to calculate days inventory outstanding (DIO). (Enter ratios to two decimal places and use a 365-day year. Round your final answers to the nearest whole number.) Days' inventory outstanding (DIO) 2020 2019 Inventory 63,000 96.000 5,000 77,000 13,000 d. Accounts receivable turnover. 227,000 Prepaid expenses Total current assets Accounts payable Total current liabilities 233,000 65,000 70,000 55,000 Select the formula, and then enter the amounts to calculate accounts receivable turnover. (Round the ratios to two decimal places.) 137,000 96,000 Accounts receivable turnover Income statement: 2020 Net credit sales $ 493,000 $ 509,000 Cost of goods sold 278,000 287,000 d. Accounts receivable turnover. Select the formula, and then enter the amounts to calculate accounts receivable turnover. (Round the ratios to two decimal places.) Accounts receivable turnover 2020 = 2019 e. Days' sales in average receivables or days' sales outstanding (DSO). Select the formula, and then enter the amounts to calculate days' sales in average receivables or days' sales outstanding (DSO). (Enter ratios to two decimal places and use a 365-day year. Round your final answers to the nearest whole number.) Days' sales outstanding (DSO) 2020 Data table 2019 = = 2020 2019 f. Accounts payable turnover and days payable outstanding (DPO). Use cost of goods sold in the formula for accounts payable turnover. Begin by selecting the formula, and then enter the amounts to calculate accounts payable turnover. (Round the ratios to two decimal places.) 2018 Balance sheet: Accounts payable turnover Cash 39,000 $ 45,000 2020 = Short-term investments 14.000 22.000 2019 Net receivables 73,000 76,000 50,000 63,000 Inventory 96,000 5,000 77,000 13,000 Now, select the formula, and then enter the amounts to calculate days payable outstanding (DPO). (Enter ratios to two decimal places and use a 365-day Days' payable outstanding (DPO) 2020 233,000 Prepaid expenses Total current assets Accounts payable Total current liabilities Income statement: 227,000 70,000 137,000 65,000 55,000 2019 96,000 g. Cash conversion cycle (in days). (Abbreviations used: Avg = average and ST = short-term.) Cash conversion cycle Net credit sales 493,000 $ 509,000 287,000 2020 Cost of goods sold 278,000 2019 + Requirement 2. Evaluate the company's liquidity and current debt-paying ability for 2020. Has it improved or deteriorated from 2019? Ratio Improved or Deteriorated a. Current ratio b. Quick (acid test) ratio c. Inventory turnover and days' inventory outstanding (DIO) d. Accounts receivable turnover e. Days' sales in average receivables or days' sales outstanding (DSO) f. Accounts payable tumover and days' payable outstanding (DPO) g. Cash conversion cycle (in days) Requirement 3. As a manager of this company, what would you try to improve next year? The factors that need the most improvement are and The company needs to make sales and keep inventory on hand, as well as The financial statements of Advent News, Inc., include the following items: (Click the icon to view the financial statements.) Requirements ... Requirement 1. Compute the following ratios for 2020 and 2019. a. Current ratio Select the formula, and then enter the amounts to calculate the current ratio. (Round the ratios to two decimal places.) Current ratio 2020 2019 b. Quick (acid-test) ratio. Select the formula, and then enter the amounts to calculate the acid-test ratio. (Abbreviations used: Avg = average, ST = short-term, and Cash* = cash and cash equivalents. Round the ratios to two decimal places.) )/ Acid-test ratio 2020 ( 2019 ( Data table c. Inventory turnover and days' inventory outstanding (DIO). Begin by selecting the formula, and then enter the amounts to calculate inventory turnover. (Round the ratios to two decimal places.) Inventory turnover 2020 2019 2020 2019 2018 Balance sheet: Cash 39,000 $ 14,000 45,000 22.000 Short-term investments Net receivables 73,000 76,000 50,000 Now, select the formula, and then enter the amounts to calculate days inventory outstanding (DIO). (Enter ratios to two decimal places and use a 365-day year. Round your final answers to the nearest whole number.) Days' inventory outstanding (DIO) 2020 2019 Inventory 63,000 96.000 5,000 77,000 13,000 d. Accounts receivable turnover. 227,000 Prepaid expenses Total current assets Accounts payable Total current liabilities 233,000 65,000 70,000 55,000 Select the formula, and then enter the amounts to calculate accounts receivable turnover. (Round the ratios to two decimal places.) 137,000 96,000 Accounts receivable turnover Income statement: 2020 Net credit sales $ 493,000 $ 509,000 Cost of goods sold 278,000 287,000 d. Accounts receivable turnover. Select the formula, and then enter the amounts to calculate accounts receivable turnover. (Round the ratios to two decimal places.) Accounts receivable turnover 2020 = 2019 e. Days' sales in average receivables or days' sales outstanding (DSO). Select the formula, and then enter the amounts to calculate days' sales in average receivables or days' sales outstanding (DSO). (Enter ratios to two decimal places and use a 365-day year. Round your final answers to the nearest whole number.) Days' sales outstanding (DSO) 2020 Data table 2019 = = 2020 2019 f. Accounts payable turnover and days payable outstanding (DPO). Use cost of goods sold in the formula for accounts payable turnover. Begin by selecting the formula, and then enter the amounts to calculate accounts payable turnover. (Round the ratios to two decimal places.) 2018 Balance sheet: Accounts payable turnover Cash 39,000 $ 45,000 2020 = Short-term investments 14.000 22.000 2019 Net receivables 73,000 76,000 50,000 63,000 Inventory 96,000 5,000 77,000 13,000 Now, select the formula, and then enter the amounts to calculate days payable outstanding (DPO). (Enter ratios to two decimal places and use a 365-day Days' payable outstanding (DPO) 2020 233,000 Prepaid expenses Total current assets Accounts payable Total current liabilities Income statement: 227,000 70,000 137,000 65,000 55,000 2019 96,000 g. Cash conversion cycle (in days). (Abbreviations used: Avg = average and ST = short-term.) Cash conversion cycle Net credit sales 493,000 $ 509,000 287,000 2020 Cost of goods sold 278,000 2019 + Requirement 2. Evaluate the company's liquidity and current debt-paying ability for 2020. Has it improved or deteriorated from 2019? Ratio Improved or Deteriorated a. Current ratio b. Quick (acid test) ratio c. Inventory turnover and days' inventory outstanding (DIO) d. Accounts receivable turnover e. Days' sales in average receivables or days' sales outstanding (DSO) f. Accounts payable tumover and days' payable outstanding (DPO) g. Cash conversion cycle (in days) Requirement 3. As a manager of this company, what would you try to improve next year? The factors that need the most improvement are and The company needs to make sales and keep inventory on hand, as well as
