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3 years ago

Quick Ratio

Business

1 answer:

Igoryamba3 years ago

3 0

Answer:

2015 - Quick ratio = 0.52

2016 - Quick ratio = 0.52

Explanation:

The quick ratio is a measure of how well a company can meet its short-term financial liabilities.

It is also known as the acid-test ratio.

It can be calculated as follows: (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities.
The simplest formula is

Quick ratio Formula

(Current assets - stock) ÷ current liabilities - this will be used in the calculations.

Current assets:

Cash and other assets that are expected to be converted to cash within a year.

Current liabilities: Current liabilities are a company's short-term financial obligations that are due within one year or within a normal operating cycle.

Workings:

2015 - Quick ratio:

Quick ratio = (Current assets - stock) ÷ current liabilities

Quick ratio = ($2,400 - $800) ÷ $3,050

Quick ratio = 0.52 (answer)

2016 - Quick ratio:

Quick ratio = (Current assets - stock) ÷ current liabilities

Quick ratio = ($2,300 - $650) ÷ $3,150

Quick ratio = 0.52 (answer)

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Juan, not a dealer in real property, sold land that he owned. His adjusted basis in the land was $700,000 and it was encumbered

Zielflug [23.3K]

Answer:

45.45%

Explanation:

The total selling price was $200,000 (paid on the date of the sale) + $900,000 (note received) = $1,100,000

Juan's cost of he land = $700,000 (basis) - $100,000 (mortgage) = $600,000

Juan's profit = $1,100,000 - $600,000

Juan's gross profit percentage = $500,000 / $1,100,000 = 45.45%

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3 years ago

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3 years ago

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What is a subcontractor

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3 years ago

On January 1, 2014 the Accounts Receivable and the Allowance for Doubtful Accounts carried balances of $30,000 and $500, respect

san4es73 [151]

Answer:

correct option is $750

Explanation:

solution

we know here that Net balance of opening accounts receivable is

Net balance of opening accounts receivable = $30000 - $500

Net balance of opening accounts receivable = $29500

and

Credit sales during the year is here $7500 0

and Cash payments received = 74550

uncollecectible account expenses = credit sales × % of sale uncollectible

so uncollecectible account expenses = $75000 × 1%

uncollecectible account expenses = $750

so correct option is $750

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3 years ago

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all produc

Pavlova-9 [17]

Answer:

Part a 

Belmain Co.

Estimated Income statement for the year ended 2017.

Sales ($240 x 12,000) $2,880,000

Less Variable Costs :

Direct Materials ($50.00 x 12,000) ($600,000)

Direct Labor ($30.00 x 12,000) ($360,000)

Factory Overheads ($6.00 x 12,000) ($72,000)

Sales Salaries and Commissions ( $4.00 x 12,000) ($48,000)

Miscellaneous selling expenses ( $1.00 x 12,000) ($12,000)

Supplies ($4.00 x 12,000) ($48,000)

Miscellaneous administrative expenses ($1.00 x 12,000) ($12,000)

Contribution $1,728,000

Less Fixed Expenses :

Factory overhead ($350,000)

Sales salaries and commissions ($340,000)

Advertising ($116,000)

Travel ($4,000)

Miscellaneous selling expense ($2,300)

Office and officers’ salaries ($325,000)

Supplies ($6,000)

Miscellaneous administrative expense ($8,700)

Net Income ( Loss) $576,000

Part b

0.6 or 60 %

Part c

Break-even sales (units) = 8,000

Break-even sales (dollars) = $1,920,000

Part d

See attachment

Part e

Margin of safety in dollars = $960,000

Margin of safety in percentage = 33.3 %

Part f

Operating Leverage = 3.00

Explanation:

Income Statement :

Sales - Expenses = Income

Note : I have separated Variable and Fixed Expenses

Contribution Margin ratio :

Contribution Margin ratio = Contribution ÷ Sales

= $1,728,000 ÷ $2,880,000

= 0.6 or 60 %

Break-even sales ( units and dollars) :

Break-even sales (units) = Fixed Costs ÷ Contribution per unit

= $1,152,000 ÷ $144.00

= 8,000

Break-even sales (dollars) = Fixed Costs ÷ Contribution margin ratio

= $1,152,000 ÷ 0.60

= $1,920,000

Margin of safety in dollars and as a percentage of sales :

Margin of safety in dollars = Expected Sales (dollars) - Break-even sales (dollars)

= $2,880,000 - $1,920,000

= $960,000

Margin of safety in % = (Expected Sales - Break-even sales ) ÷ Expected Sales

= $960,000 ÷ $2,880,000

= 33.3 %

Operating leverage

Operating Leverage = Contribution ÷ Earnings Before Interest and Tax

= $1,728,000 ÷ $576,000

= 3.00

3 0

3 years ago