Answer:
Consider the following calculations
Explanation:
(a)-Current Ratio
Current Ratio = Total current assets / Total current liabilities
= [Cash + A/R + Inventory] / Accounts Payables
= [$33,450 + $156,100 + $133,800] / $111,500
= $323,350 / $111,500
= 2.90
(b)-Accounts Receivables Turnover
Accounts Receivables Turnover = Net credit sales / Average accounts receivables
= [$377,100 - $27,600] / [($156,100 + $133,800)/2]
= $349,500 / $144,950
= 2.4 Times
(c)-Average collection period
Average collection period = 365 Days / Accounts Receivables Turnover
= 365 Days / 2.4 Times
= 152.1 Days
(d)-Inventory Turnover
Inventory Turnover = Cost of goods sold / Average Inventory
= $200,200 / [($133,800 + $111,500)/2]
= $200,200 / $122,650
= 1.63 Times
(e)-Days in Inventory
Days in Inventory = 365 Days / Inventory Turnover
= 365 Days / 1.63 Times
= 223.9 Days
(f)-Free Cash Flow
Free Cash Flow = Net cash provided by operating activities – Capital expenditures – Dividends paid
= $56,000 - $28,200 - $19,300
= $8,500
