Page 412 - FR Integrated Workbook 2018-19

Chapter 24

Example 2 cont.

Solution

20X6 20X5
Current ratio

Current assets/current liabilities
(8,600/4,100) 2.1 (8,200/3,320) 2.5

Quick ratio

Current assets (exc inventory)/current liabilities
(3,500/4,100) 0.9 (3,600/3,320) 1.1

Inventory holding period
(Inventory/Cost of sales) × 365

(5,100/19,700) 94 days (4,600/17,100) 98 days
× 365 × 365

Receivables collection period

(Receivables/Revenue) × 365
(3,300/27,000) 45 days (2,700/24,000) 41 days

× 365 × 365

Payables payment period
(Payables/Cost of sales) × 365

(3,200/19,700) 59 days (2,400/17,100) 51 days
× 365 × 365

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