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KarenSmith KarenSmith
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7 years ago
Presented below is selected data for Swipes, Inc.:
        2005              2004     
   Cash   $ 176,400   $ 106,600
   Accounts receivable   117,800   121,100
   Merchandise inventory   262,200   319,700
   Prepaid expenses   76,400   146,900
   Accounts payable   175,400   178,900
   Notes payable (current)   325,500   431,700
   Total stockholder's equity   696,700   655,200
   Net sales   1,881,000   1,878,900
   Cost of sales   1,036,500   1,034,000

REQUIRED:
1.   Calculate Swipe's net sales to working capital ratio for 2005 and 2004.
2.   What conclusions can be drawn regarding Swipe's liquidity, based on the ratios you calculated in 1?
3.   Assume the industry average is 8.87 times. How does Swipe's ratios compare to the industry average?
Textbook 
Survey of Accounting: Making Sense of Business

Survey of Accounting: Making Sense of Business


Edition: 1st
Author:
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hol23hol23
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7 years ago
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KarenSmith Author
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7 years ago
Many thanks
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