Author Question: Selected financial statement data for Oran Company are presented below.December 31, 2021December 31, ... (Read 8 times)

jlol3 · **on:** Feb 5, 2023

Selected financial statement data for Oran Company are presented below.

December 31, 2021

December 31, 2020

Cash	$ 40,000	$ 30,000
Short-term investments	25,000	18,000
Receivables (net)	100,000	80,000
Inventories	85,000	65,000
Total current liabilities	100,000	90,000

During 2021, net sales were $950,000, and cost of goods sold was $775,000.

Required:

a.	Compute the following ratios at December 31, 2021:

(1)	Current ratio

(2)	Acid-test ratio

(3)	Average collection period

(4)	Average days to sell inventory

b.	Assume credit terms are 2/10, net 30. What conclusion could an analyst draw about

the management of accounts receivable?

Hamad · **Reply #1 on:** Feb 5, 2023

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