Question

1. What is Current Ratio

2. what are the Days sales outstanding (days sales in receivables)

3. what is the Cash Ratio

4. what is the Inventory Turnover

Tiger Inc: December 31 Balance Sheets (Thousands of Dollars)			Tiger Inc December 31 Income Statements (Thousands of Dollars)
Assets	2019			2019
Cash and cash equivalents	$20,000		Sales	$425,000
Accounts Receivable	52,500		COGS	327,000
Inventories	87,750		Depreciation and Amortization	17,480
Total current assets	$160,250		EBIT	$80,520
Net fixed assets	218,500		Interest Expense	5,740
Total assets	$378,750		EBT	$74,780
Liabilities and equity			Taxes (40%)	29,912
Accounts payable & accruals	$66,000		Net Income	$44,868
Line of credit	0		Common Dividends	$18,125
Total current liabilities	$66,000		Addition to Retained Earnings	$26,743
Long-term debt	67,500
Total liabilities	$133,500
Common stock	183,175
Retained Earnings	62,075
Total common equity	$245,250
Total liabilities and equity	$378,750
Other Data
	2019
Exp. Sales growth rate	11.00%
Interest rate on LT debt	7.00%
Interest rate on LOC	5.00%
Dividend growth rate	9.00%
Tax rate	40%

Answer 1

Since the question contains only data in relation to balance sheet as on 31 December 2019, for the calculation of ratios, the closing balances have been considered instead of averages.

Note, all figures are considered in thousand dollars (as provided in the question)

(a) Current Ratio = Current assets / current liabilities

Total current assets = $160,250, Total current liabilities = $66,000

=> Current ratio = 160250 / 66000 = 2.428:1 (approximately)

(b) Days sales outstanding = Accounts receivables / Total sales during the period * 365 days

= 52,500 / Sales * 365 days

52500 / 425000 * 365 = 45.1 days (approximately)

(c) Cash ratio = Total Cash & cash equivalents / Total current liabilities

= 20,000 / 66,000 = 0.303:1

(d) Inventory Turnover = Total cost of goods sold / Inventory

= 327000 / 87750 = 3.73 times (approximately)