Answer:
<em>The Current Ratio = 7.59
</em>
<em>
The Acid test Ratio = 1.28
</em>
<em>
The Gross margin ratio = (Gross profit)/(Total Revenue)
</em>
<em>
where gross profit = Sales- Cost Of Sales:</em>
Explanation:
<em>The First step to take is to calculate the current ratio which is the measure of current liabilities and assets </em>
<em> The the formula is :
</em>
<em>
The ratio (Current) = (current assets)/ (current liabilities)
</em>
<em>
The current assets are assets that given here, the store supplies balance of $2050 then further we have Inventory( Stock) balance at the year end of $10100 or assets that are liquidated or in 12 months or less. </em>
<em>
Then
</em>
<em>The current liabilities are those liabilities that an admin expense which means that these are Differed expenses which are a liability that will be paid off in the next accounting period which amount to $1600 Or that can be paid in 12 months or lesser of which here we are given expired insurance and. Therefore the current ratio will be:
</em>
<em>The Current Ratio = ($2050+$10100)/($1600)
</em>
<em> Current ratio = 7.59 correct to two decimal places.
</em>
<em>
The acid test ratio is calculated by adding up all the most liquid able assets over the total liabilities in the company. the formula is given as,
</em>
<em>
The Acid test ratio = (most liquidable assets)/(Total Liabilities)
</em>
<em>
Which is,
</em>
<em>Acid Test Ratio = ($2050)/($1600)
</em>
<em>
Acid Test Ratio = 1.28 correct to two decimal places
</em>
<em>
When the most liquidable asset is the store supplies and the total given liabilities are the one given for the expired insurance and an admin expense.
</em>
<em>
The last ratio is the gross margin ratio which is calculated by dividing he gross profit of a company by the total revenue a company gains
</em>
<em>Therefore,
</em>
<em> the formula is Gross Margin Ratio = (Gross profit)/(Total Revenue), where Gross profit = Sales - Cost of Sales. Then to find the Total Revenue which is the Gross Profit - Operating expenses.
</em>
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