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Q21. Solution: (values in Thousands of dollars)
Current Ratio is calculated to check the short-term liquidity position of the company.
Current Assets = $5,320
Current Liabilities = Accounts payable = $2,775
Current Ratio = $5,320 / $2,775
Current Ratio = 1.917 or 1.92
So, the correct option is (a) 1.92
Q22. Solution: (values in thousands of dollars, except number of days)
Average collection period (ACP) is number of days it takes to collect money from customers after sale.
Average collection period = 0.0544 x 365
Average collection period = 19.856 or 19.86 days
So, the correct option is (d) 19.86 days.
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