Ivanhoe Medical manufactures hospital beds and other institutional furniture. Th

Question

Ivanhoe Medical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2015 and 2016 follow Ivanhoe Medical Comparative Balance Sheet As of December 31 2016 2015 Assets Current assets Cash Accounts receivable, net Inventory Other current assets $417,500 776,500 681,050 247,000 2,122,050 8,439,845 $11,261,025 $10,561,895 $380,000 1,035,000 726,000 381,400 2,522,400 8,738,625 Total current assets Property, plant, & equipment, net Total assets Liabilities and Stockholders' Equity Current liabilities Long-term debt $3,201,000 $2,846,100 3,892,600 6,738,700 58,900 103,900 3,660,395 3,823,195 $11,261,025$10,561,895 3,702,650 6,903,650 58,900 104,700 4,193,775 4,357,375 Total liabilities Preferred stock, $5 par value Common stock, $0.25 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity

Explanation / Answer

Liquidity Ratios for the Year 2016: A Working Capital Current Assets-Current Liabilities 2522400-3201000 -678600 B Current Ratio Current Assets/Current Liabilities 2522400/3201000 0.79 C Acid Test Ratio (Current Assets-Inventory-Other Current Assets)/Current Liabilities (2522400-726000-381400)/3201000 0.44 D Accounts Recievable Turnover Ratio Net Credit Sales/Average Account Recievables* 10177200/905750 11.24 Average Account Recievables* Opening Account Recievables 776500 Closing Account Recievables 1035000 Average Account Recievables 905750

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