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# Financial Statement Analysis - Current Ratio, Days in Inventory ratio, Inventory turnover ratio, Accounts Receivable Turnover ratio

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Attached are the financial statements for one company for the years 2013 and 2014. Use the statements to calculate the following:
1. Calculate the current ratio at year-end 2014.
2. Calculate the days in inventory ratio for 2014.
3. Calculate the inventory turnover for 2014.
4. Calculate the Accounts Receivable Turnover for 2014.

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#### Solution Preview

Solution is attached.

FINANCIAL STATEMENT ANALYSIS
RATIO ANALYSIS
The following is the Balance Sheet of Trea Trades Ltd:
BALANCE SHEET Dec 31, 2014 Dec 31, 2013
Cash \$ 21,000 \$ 18,000
Accounts receivable, net 31,000 35,000
Inventory 53,000 25,000
PP&E, net 120,000 90,000
Total assets \$225,000 \$168,000

Accounts payable \$4,000 \$ 6,000
Accrued liabilities 2,000 1,000
Long-term notes payable 84,000 90,000
Total liabilities \$ 90,000 \$ 97,000

Common stock \$ 30,000 ...

#### Solution Summary

This questions teaches the student how to use the financial statements of a company to determine the current ratio, the days in inventory ratio, the inventory turnover ratio, and the accounts receivable turnover ratio.

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