It is only as good as the information put into it. You must very good and correct information in order to have good decision. <span>It is not suitable for small tables (little input information and "small" problems).</span>
Answer:
0.75 times
Explanation:
The formula and the calculation of acid test ratio is presented below
Acid test ratio = Quick assets ÷ total current liabilities
where,
Quick assets = Cash + current accounts receivable
= $15,000 + $30,000
= $45,000
And, the current liabilities is $60,000
So, the acid test ratio would be
= $45,000 ÷ $60,000
= 0.75 times
Profits & Losses (Profits are plus amounts and losses are negative amounts)
Answer:
d. 12.5 times.
Explanation:
The computation of the accounts receivable turnover ratio is shown below:
Account receivable turnover ratio = Net credit sales ÷ Average accounts receivable
where,
Net credit sales is $8,500,000
And, the Average accounts receivable would be
= (Accounts receivable, beginning of year + Accounts receivable, end of year) ÷ 2
= ($600,000 + $760,000) ÷ 2
= $680,000
So, the accounts receivable turnover ratio would be
= $8,500,000 ÷ $680,000
= 12.5 times
We simply applied the above formula
Answer
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
