Financial Statement Analysis

Frizell Company has the following comparative balance sheet data.

Additional information for 2020:

1. Net income was $25,000
2. Sales on account were $410,000. Sales returns and allowances were $20,000
3. Cost of goods sold was $198,000

Instructions

Compute the following ratios at December 31, 2020.

1. Current Ratio
2. Acid-test Ratio
3. Accounts receivable turnover.
4. Inventory turnover

Solution