Ratio Analysis Paper 1

1


Tosh Enterprises reported the following account information:
Accounts receivable $400,000
Accounts payable $260,000
Bonds payable, due in 10 years $600,000
Cash $200,000
Interest payable, due in 3 months $20,000
Inventory $800,000
Land $500,000
Short-term prepaid expense $80,000
The current ratio for Tosh Enterprises is






2


Tosh Enterprises reported the following account information:
Accounts receivable $400,000
Accounts payable $260,000
Bonds payable, due in 10 years $600,000
Cash $200,000
Interest payable, due in 3 months $20,000
Inventory $800,000
Land $500,000
Short-term prepaid expense $80,000
What is Tosh Enterprises’ quick (acid test) ratio?






3


Tosh Enterprises reported the following account information:
Accounts receivable $400,000
Accounts payable $260,000
Bonds payable, due in 10 years $600,000
Cash $200,000
Interest payable, due in 3 months $20,000
Inventory $800,000
Land $500,000
Short-term prepaid expense $80,000
Tosh Enterprises’ amount of working capital is






4

A financial analyst has obtained the following data from Kryton Industries’ financial statements:

Cash $200,000
Marketable securities $100,000
Accounts receivable, net $300,000
Inventories, net $480,000
Prepaid expenses $120,000
Total current assets $1,200,000

Accounts payable $250,000
Income taxes $50,000
Accrued liabilities $100,000
Current portion of long-term debt $200,000
Total current liabilities $600,000
In order to determine Kryton’s ability to pay current obligations the financial analyst would calculate Kryton’s cash ratio as






5

Given an acid test ratio of 2.0, current assets of $5,000, and inventory of $2,000, the value of current liabilities is






6


The selected data pertain to Tilghman Company at December 31:
Quick assets $208,000
Acid test ratio 2.6 to 1
Current ratio 3.5 to 1
Net sales for the year $1,800,000
Cost of sales for the year $990,000
Average total assets for the year $1,200,000
Tilghman Company’s current liabilities at December 31 equal






7

Devlin Company’s acid test ratio at May 31 Year 2, was






8

Beatnik Company has a current ratio of 2.5 and a quick ratio of 2.0. If the firm experienced $2 million in cost of sales and sustains an inventory turnover of 8.0 what are the firm’s current assets?






9

All of the following are included when calculating the acid test ratio except






10

A company’s cash ratio will decrease if the company






Result

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Wrong Answers:
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