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##### solve the following: round to the nearest hundreth

 Mathematics Tutor: None Selected Time limit: 1 Day

solve the following:

current ratio acid test

avg day's collection

asset turnover

profit margin

Current assets \$18,000 A/R 3,000, C/L 16,000 Inventory 2,000, Net sales 41,000 total assets 29,000 net income 6,000

Apr 13th, 2015

Current ratio = Current assets/Current liabilities

= \$18,000/\$16,000

= 1.125

Acid test = (Current assets - Inventory)/Current liabilities

= (\$18,000 - \$2,000)/\$16,000

= \$16,000/\$16,000

= 1

In acid test, we take current assets minus inventory because value of cash and other current assets are not provided.

Average day's collection = (Days * Accounts Receivable)/Sales

= (365 * \$3,000)/\$41,000

= 26.71

Assets turnover = Sales/Total Assets

= \$41,000/\$29,000

= 1.41

Profit Margin = Net income/Net sales

= \$6,000/\$41,000

= 0.1463 or                    14.63%

Apr 14th, 2015

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Apr 13th, 2015
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Apr 13th, 2015
Dec 4th, 2016
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