The following data were shown in the records of Morgan Company at the end of 20B:
Compute the following ratios
(a) Quick ratio:
(b) Current (working capital) ratio:
(c) Receivable turnover:
(d) Inventory turnover:
(e) Average age of receivables
(f) Average days' supply in inventory
Definitions:
Preferential Payment
A payment made by a debtor to one creditor over others, typically before a bankruptcy, that can be subject to clawback during bankruptcy proceedings.
Chapter 7 Bankruptcy
A type of bankruptcy that involves the liquidation of assets to repay creditors, used when the individual or business is unable to reorganize debt and lacks the means to pay it off.
Discharged Debts
Debts that have been forgiven or eliminated, usually through bankruptcy proceedings, and are no longer legally enforceable.
Repay
To return money that was borrowed, often including interest in the case of loans or credit.
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