Compute for the 1)Net working formula, 2)Working capital turnover, 3) Current ratio
Compute for the 1)Net working formula, 2)Working capital turnover, 3) Current ratio
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter6: Receivables And Inventories
Section: Chapter Questions
Problem 6.1MBA
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Question
Compute for the 1)Net working formula, 2)
![Problem 7
You have been asked by the Chief Financial Officer of Coffee Lover
Corporation to analyze its liquidity position in 2019. You have gathered the
following data from the records of the company and industry published reports (in
thousands):
Coffee Lover Corporation Industry Average
P2,000
Average cash
Average trade receivables
Average inventory
Average trade payables
Р3,500
8,000
10,000
7,000
6,500
14,000
20,000
12,000
25,000
Net cash sales](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F738e1829-f5de-4e63-bb74-508944d5c46e%2Fccc041a0-21e8-4f15-8398-741319fee0bd%2Fx2zmq7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 7
You have been asked by the Chief Financial Officer of Coffee Lover
Corporation to analyze its liquidity position in 2019. You have gathered the
following data from the records of the company and industry published reports (in
thousands):
Coffee Lover Corporation Industry Average
P2,000
Average cash
Average trade receivables
Average inventory
Average trade payables
Р3,500
8,000
10,000
7,000
6,500
14,000
20,000
12,000
25,000
Net cash sales
![Net credit sales
200,000
150,000
Cost of sales
130,000
140,000
112,000
96,000
Net credit purchases
The company uses a 360-day a year base. The credit terms offered to
customers are 2/10, n/40. Suppliers give credit terms of 3/20, n/40.
Required: For Coffee Lover Corporation and the industry, compute the following:
a. Receivable turnover
b. Collection period
c. Inventory turnover
d. Inventory days (Days to sell inventory)
e. Payable turnover
f. Payment period
g. Operating cycle
h. Net cash cycle
i. Net working capital
j. Working capital turnover
k. Current ratio
ab
Acid-test (Quick-assets) ratio
Please present your solution below.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F738e1829-f5de-4e63-bb74-508944d5c46e%2Fccc041a0-21e8-4f15-8398-741319fee0bd%2Fmwla4b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Net credit sales
200,000
150,000
Cost of sales
130,000
140,000
112,000
96,000
Net credit purchases
The company uses a 360-day a year base. The credit terms offered to
customers are 2/10, n/40. Suppliers give credit terms of 3/20, n/40.
Required: For Coffee Lover Corporation and the industry, compute the following:
a. Receivable turnover
b. Collection period
c. Inventory turnover
d. Inventory days (Days to sell inventory)
e. Payable turnover
f. Payment period
g. Operating cycle
h. Net cash cycle
i. Net working capital
j. Working capital turnover
k. Current ratio
ab
Acid-test (Quick-assets) ratio
Please present your solution below.
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