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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 47
Computing and Interpreting Liquidity Ratios
Cintas Corporation is the largest uniform supplier in North America, providing products and services to approximately 800,000 businesses of all types. Selected information from its 2010 annual report follows. For the 2010 fiscal year, the company reported sales revenue of $2.6 billion and Cost of Goods Sold of $1.5 billion.
Required:
Assuming that all sales are on credit, compute the current ratio (two decimal places), inventory turnover ratio (one decimal place), and accounts receivable turnover ratio (one decimal place) for 2010. Explain what each ratio means for Cintas.
Cintas Corporation is the largest uniform supplier in North America, providing products and services to approximately 800,000 businesses of all types. Selected information from its 2010 annual report follows. For the 2010 fiscal year, the company reported sales revenue of $2.6 billion and Cost of Goods Sold of $1.5 billion.
Required:
Assuming that all sales are on credit, compute the current ratio (two decimal places), inventory turnover ratio (one decimal place), and accounts receivable turnover ratio (one decimal place) for 2010. Explain what each ratio means for Cintas.
Explanation
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Calculate current ratio for 2010:
• Cur...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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