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f. Age of Receivables (Use 360 days) g. Inventory Turnover h. Days Supply in Inventory...


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Transcribed: FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS The following are the balance sheet and income statement data of PRT Company: December 31 1997 1998 Balance Sheet Accounts Cash P30,000 P52,000 Marketable Securities 170,000 200,000 100,000 200,000 Accounts Receivable, net Inventories 150,000 100,000 Machinery and Equipment, net 340,000 300,000 110,000 100,000 Land and Building, net Goodwill 80,000 80,000 Deferred Charges 20,000 18,000 Notes Payable, Trade 20,000 30,000 122,000 158,000 Accounts Payable, Trade Expenses Payable 8,000 12,000 500,000 450,000 Long-term Notes-Due 2008 15% Preferred Stock, P100 par 100,000 100,000 Common Stock, P10 par 200,000 200,000 Retained Earnings 50,000 100,000 1998 Income Statement Accounts Sales P1,050,000 50,000 Sales Returns and Allowances 100,000 Inventory, December 31, 1998 Inventory, December 31, 1997 Purchases 150,000 550,000 Selling Expenses 80,000 Administrative Expenses (including depreciation of P25,000) 120,000 Interest on Long-term Notes 50,000 Income Taxes, 35% 52,500 Additional Information: 1. Dividends paid on preferred stock 15,000 2. Dividends paid on common stock 32,500 18 3. Market price per share of common stock 4. Evaluate the firm's short-term solvency for 1998 by computing: a. Working Capital b. Current Ratio c. Acid-test Ratio d. Cash Flow from Operations to Current Liabilities e. Receivable Turnover f. Age of Receivables (Use 360 days) g. Inventory Turnover h. Days Supply in Inventory i. Working Capital Turnover j. Current Asset Turnover

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Age of receivables is the measure in which company determines about how much time in days a debtor or a credit sales takes to the company to collect the money from the debtors or in other words, after...

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