A Company had the following data extracted from its financial-01992
This subjective question is related to the book/course
vu mgt411 Money & Banking.
It can also be found in
vu mgt411 Mid Term Solved Past Paper No. 7.
Question 1: A Company had the following data, extracted from its financial statements for the yearending June 30, 2008:
Current Ratio = 2
Acid Ratio = 1.5
Current Liabilities = $500,000
Inventory Turnover = 5
Gross Profit Margin = 20 percent
What were its sales for the year?
2 = current asset / 500,000
current asset = 1000,000
Acid Ratio = (current asset - inventory) / current liabilities
1.5 = ( 1000,000 - inventory) / 500,000
Inventory = 250,000
Inventory Turnover = CGS / inventory
5 = CGS / 250,000
CGS = 1250,000
Sales 100% 1562,500 (1250,000/0.8)
CGS 80% 1250,000
GP20%
Current Ratio = 2
Acid Ratio = 1.5
Current Liabilities = $500,000
Inventory Turnover = 5
Gross Profit Margin = 20 percent
What were its sales for the year?
Answer:
Current ratio = current asset / current liabilities2 = current asset / 500,000
current asset = 1000,000
Acid Ratio = (current asset - inventory) / current liabilities
1.5 = ( 1000,000 - inventory) / 500,000
Inventory = 250,000
Inventory Turnover = CGS / inventory
5 = CGS / 250,000
CGS = 1250,000
Sales 100% 1562,500 (1250,000/0.8)
CGS 80% 1250,000
GP20%
