Liquidity, Solvency and Profitability RatiosLiquidity, Solvency and Profitability Ratiosa) For each company, compute the following ratios1. Current RatioAll computations are in the excel sheets ALMARAEI= 18424/11327=1.6266ALSAFI, Inc.=48331/55561= 0.86992. Assets Receivable Turnover (ART)ALMARAEI Average Net Accounts Receivable =$7525Net sales =$65357ART= Net sales/Average Net Accounts Receivable =65357/7525=8.69ALSAFI, Inc.Average Net Accounts Receivable =$ 4025Net sales =$408214ART= Net sales/ Average Net Accounts Receivable =408214/4025 =101.423. Average collection period (in days)Average collection period (in days) = average accounts receivable/ total net salesALMARAEIAverage collection period (in days)= 7525/ 65357 x 365=42.03 daysALSAFI, Inc.=4025/408214 x 365= 3.60 days4. Inventory turnoverInventory turnover ratio= cost of goods sold/Average inventoryALMARAEI = 65357/ 6942= 6.5663ALSAFI, Inc.= 304657/ 33836= 9.00395. Days in inventoryDays in inventory=Inventory / COGS x 365ALMARAEI= 6942/45583
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