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Problem 1 (Liquidity Ratios) You have been asked to evaluate the liquidity position of Burgos Fitness Center. The following data are from Burgos' annual report: Cash = 130,000 Trading Investments = 60,000 Accounts Receivable: January 1 = 156,000 December 31 = 214,000 Merchandise Inventory January 1 = 252,000 December 31 = 186,000 Current Liabilities = 240,000 Cost of Goods Sold = 3,000,000 Credit Sales = 5,000,000 Required: Using the data, calculate Burgos' 1. Working capital 2. Current ratio 3. Quick ratio

Problem 1 (Liquidity Ratios) You have been asked to evaluate the liquidity position of Burgos Fitness Center. The following data are from Burgos' annual report: Cash = 130,000 Trading Investments = 60,000 Accounts Receivable: January 1 = 156,000 December 31 = 214,000 Merchandise Inventory January 1 = 252,000 December 31 = 186,000 Current Liabilities = 240,000 Cost of Goods Sold = 3,000,000 Credit Sales = 5,000,000 Required: Using the data, calculate Burgos' 1. Working capital 2. Current ratio 3. Quick ratio

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter24: Analysis Of Financial Statements
Section: Chapter Questions
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Problem 1 (Liquidity Ratios)

You have been asked to evaluate the liquidity position of Burgos Fitness Center. The following data are from Burgos' annual report:

Cash = 130,000

Trading Investments = 60,000

Accounts Receivable:
January 1 = 156,000
December 31 = 214,000

Merchandise Inventory
January 1 = 252,000
December 31 = 186,000

Current Liabilities = 240,000

Cost of Goods Sold = 3,000,000

Credit Sales = 5,000,000


Required: Using the data, calculate Burgos'

1. Working capital
2. Current ratio
3. Quick ratio
4. Inventory turnover
5. Accounts receivable turnover
5. Average age of receivables

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