Solution:
Problem 7:
a.). Current ratio = CurrentLiabilitiesCurrentAssets
Current assets = Cash + Credit card receivables + Accounts receivable + Food inventory + Prepaid expenses
Current assets = 12,000 + 1,800 + 180 + 4,400 + 1,120 = 19,500
Current liabilities = 7,800
Current ratio = 19,500/7,800 = 2.5
Current ratio = 2.5
b.). Quick ratio (acid-test ratio) = CurrentLiabilitiesCash+Creditcardreceivables+AccountsReceivable
=7,80012,000+1,800+180=7,80013,980=1.79
Quick ratio (acid-test ratio) = 1.79
Problem 8:
The food inventory turnover food ratio = AverageInventoryCostofgoodssold
Cost of goods sold = 36,520
Average inventory = 2(8,868+5740)=7,304
The food inventory turnover food ratio = 7,30436,520=5
The food inventory turnover food ratio = 5
Average period in days it takes for food inventory to turn over = ThefoodinventoryturnoverratioPeriod = 523=4.6days
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