The income statement of Super Dan Badminton Rackets Pty Ltd for the year ending 30
June is detailed below:

The following amounts have been extracted from the company’s balance sheet as at 30
June:

Required:
a) Calculate the following ratios for 2022 and 2021:
I. Current ratio
II. Quick ratio
III. Days inventory
IV. Days debtors
V. Activity cycle

b) Prepare a brief report commenting on the entity’s liquidity and asset efficiency
ratios.

Credit Sales Cost of goods sold Gross profit Operating expenses Profit 2022 $850 000 650 000 200 000 120 000 80 000 2021 $695 000 480 000 215 000 132 000 83 000