Computing Liquidity Ratios - Cintas designs, manufactures, and implements corporate identity uniform programs that it rents or sells to customers throughout the United States and Canada. The company’s stock is traded on the NASDAQ and has provided investors with significant returns over the past few years. Selected information from the company’s balance sheet follows. For 2007, the company reported sales revenue of $3,706,900 and cost of goods sold of $1,515,815.
CINTASBalance Sheet(amounts in thousands)
2007
2006
Cash
$35,360
$38,914
Marketable securities
120,053
202,539
Accounts receivable, net
408,870
389,905
Inventories
231,741
198,000
Prepaid expense
15,781
11,163
Accounts payable
64,622
71,635
Accrued taxes
70,763
95,363
Accrued liabilities
263,512
239,061
Long-term debt due within one year
4,141
26,653
Required:
Compute the current ratio, inventory turnover ratio, and accounts receivable turnover ratio (assuming that 60 percent of sales were on credit).
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