$20,000 $10,000 $11,000 $4,000 $30,000 $25,000 $5,000 Calcuate current ratio. Calculate acid test averae days colletion. Calcuate profit margin on sales.
To calculate the current ratio, you need to determine the current assets and current liabilities of a company. The current ratio is a measure of a company's ability to pay its short-term obligations.
1. Identify the current assets: Current assets include cash, accounts receivable, inventory, and any other assets that can be easily converted into cash within a year.
In this case, the current assets are: $20,000 (cash), $10,000 (accounts receivable), $11,000 (inventory), $4,000 (other current assets). Add them together: $20,000 + $10,000 + $11,000 + $4,000 = $45,000.
2. Identify the current liabilities: Current liabilities include accounts payable, accrued expenses, and any other short-term obligations.
Since the question did not provide any information about current liabilities, it is not possible to calculate the current ratio without this information. However, once you have the current liabilities, you can use the following formula to calculate the current ratio: Current Ratio = Current Assets / Current Liabilities.
To calculate the acid-test ratio (also known as the quick ratio), you need to determine the liquid assets of a company. The acid-test ratio provides a more stringent measure of a company's ability to pay its short-term obligations.
1. Identify the liquid assets: Liquid assets include cash, accounts receivable, and any other assets that can be quickly converted into cash within a short period (excluding inventory).
In this case, the liquid assets are: $20,000 (cash) and $10,000 (accounts receivable). Add them together: $20,000 + $10,000 = $30,000.
2. Identify the current liabilities: As mentioned above, we do not have information about current liabilities, so it's not possible to calculate the acid-test ratio without this information. However, once you have the current liabilities, you can use the following formula to calculate the acid-test ratio: Acid-Test Ratio = (Cash + Accounts Receivable) / Current Liabilities.
To calculate the average days of collection, you need to determine the average time it takes for a company to collect its accounts receivable. It measures the efficiency of a company in collecting payments from its customers.
1. Identify the accounts receivable: The accounts receivable in this case is $10,000.
2. Determine the sales: Since the question did not provide information about sales, it is not possible to calculate the average days of collection without this information. However, once you have the sales figure, you can use the following formula to calculate the average days of collection: Average Days Collection = (Accounts Receivable / Sales) * Number of Days in Period.
To calculate the profit margin on sales, you need to determine the net income and sales of a company. The profit margin on sales measures how much profit a company generates for each dollar of sales.
1. Determine the net income: The question does not provide information about net income, so it is not possible to calculate the profit margin on sales without this information. However, once you have the net income and sales figures, you can use the following formula to calculate the profit margin on sales: Profit Margin on Sales = (Net Income / Sales) * 100%.