Question

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

Answer 1

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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