Ottoman Manufacturing Company Reported Net Sales (All Credit) of $120,000

question 101

Essay

Ottoman Manufacturing Company reported net sales (all credit) of $120,000 and $140,000 for 2020 and 2021, respectively and net income of $24,000 and $32,000 for 2020 and 2021, respectively.Ottoman's 2020 and 2021 balance sheets appear below: Required:
a.Calculate the working capital for 2021.
b.Calculate the accounts receivable turnover for 2021.
c.Calculate the debt ratio for 2021.

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Definitions:

Investing Activity

Transactions involving the purchase or sale of long-term assets and investments, reflected in the cash flow statement of a company.

Operating Activities

Activities that relate to the primary operations of a company, such as selling goods and services, which generate revenue and expenses.

Fixed Assets

Long-term tangible assets used in the operations of a business, not expected to be converted to cash within a year.

Current Level

Current level often refers to the present state or condition of a measurable variable, such as production, staffing, or inventory levels.