Cintas Corporation is the largest uniform supplier in North
America. Selected information from its annual report follows. For
the 2013 fiscal year, the company reported sales revenue of $5.5
billion and Cost of Goods Sold of $3.7 billion.
Fiscal Year | 2013 | 2012 | ||||
Balance Sheet (amounts in millions) | ||||||
Cash | $ | 480 | $ | 400 | ||
Accounts Receivable, net | 740 | 690 | ||||
Inventories | 300 | 310 | ||||
Prepaid Rent | 705 | 600 | ||||
Accounts Payable | 180 | 160 | ||||
Salaries and Wages Payable | 460 | 460 | ||||
Income Tax Payable | 104 | 22 | ||||
Notes Payable (short-term) | 22 | 290 | ||||
Assuming that all sales are on credit, compute the following ratios for 2013. (Round your answers to 2 decimal places.) (Current ratio, inventory turnover ratio, accounts receviable turnover ratio
Current Ratio = Current assets / Current Liabilities |
Current Ratio = ($480+$740+$300+$705) / ($180+$460+$104+$22) |
Current Ratio = 2.90 |
Inventory turn over ratio = Cost of goods sold / Average inventory |
Inventory turn over ratio = $3,700 / (($300+$310)/2) |
Inventory turn over ratio = 12.13 |
Accounts Receivable Turnover ratio = Net credit sales / Average accounts Receivable |
Accounts Receivable Turnover ratio = $5,500 / (($740+$690)/2) |
Accounts Receivable Turnover ratio = 7.69 |
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