Question

Oasis Products, Inc. has current liabilities = $9.9 million, current ratio = 1.90 times, inventory turnover...

Oasis Products, Inc. has current liabilities = $9.9 million, current ratio = 1.90 times, inventory turnover ratio = 12.4 times, average collection period = 24 days, and sales = $110 million. What is the value of their cash and marketable securities? (Consider a 365 days a year.)

$16,064,813

$2,706,155

$18,810,000

$8,870,968

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Answer #1
Current Ratio = Current assets / current liabilities
     1.90times = current assets / $9.9 million
Current assets = $18.81 million
Inventory Turnover ratio = Sales / Inventory
12.4 times = $110 million / inventory
inventory = $ 8,870,968
Account receivable = 24 days * $110 million / 365 days
                                   = $7,232,877
Value of cash and marketable securities = $18,810,000million -$8,870,968 million -$7,232,877 million
= $2,706,155
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