The comparative financial statements of Bien Taco Restaurants for 2013, 2012, and 2011 include the following selected data:

Requirements
1. Compute these ratios for 2013 and 2012:
a. Quick ratio.
b. Accounts receivable turnover. Assume all sales are credit sales.
2. Write a memo explaining to the company owner which ratios improved from 2012 to 2013, which ratios deteriorated, and which items in the financial statements changed and caused changes in some ratios. Discuss whether this conveys a favorable or an un-favorable impression about the company.

Transcribed Image Text:

(In Thousands) 2012 2013 2011 Balance Sheet Current Assets: Cash Short-term Investments Receivables, Net of Allowance for $ 82 140 80 S 60 174 122 Doubtful Accounts of $6, $6, and $5 respectively Inventory Prepaid Expenses Total Current Assets 257 429 21 929 265 341 27 887 218 302 46 748 Total Current Liabilities Income Statement S 680700 600 Sales Revenue Cost of Goods Sold $5,189 $4,995 $4,206 2,734 2,636 2,418