Abdool Corporation has provided the following financial data:
Required:a. What is the company's working capital at the end of Year 2?b. What is the company's current ratio at the end of Year 2?c. What is the company's acid-test (quick) ratio at the end of Year 2?d. What is the company's accounts receivable turnover for Year 2?e. What is the company's average collection period for Year 2?f. What is the company's inventory turnover for Year 2?g. What is the company's average sale period for Year 2?h. What is the company's operating cycle for Year 2?i. What is the company's total asset turnover for Year 2?

a.Working capital = Current assets − Current liabilities= $628,000 − $351,000 = $277,000b.Current ratio = Current assets ÷ Current liabilities= $628,000 ÷ $351,000 = 1.79 (rounded)c.Acid-test (quick) ratio = Quick assets* ÷ Current liabilities= $387,000 ÷ $351,000 = 1.10 (rounded)*Quick assets = Cash + Marketable securities + Current receivables= $190,000 + $0 + $197,000 = $387,000d.Accounts receivable turnover = Sales on account ÷ Average accounts receivable*= $1,330,000 ÷ $198,500 = 6.70 (rounded)*Average accounts receivable = ($197,000 + $200,000) ÷ 2 = $198,500e.Average collection period = 365 days ÷ Accounts receivable turnover= 365 days ÷ 6.70 = 54.5 days (rounded)f.Inventory turnover = Cost of goods sold ÷ Average inventory*= $740,000 ÷ $216,000 = 3.43 (rounded)*Average inventory = ($232,000 + $200,000) ÷ 2 = $216,000g.Average sale period = 365 days ÷ Inventory turnover= 365 days ÷ 3.43 = 106.4 days (rounded)h.Operating cycle = Average sale period + Average collection period= 106.4 days + 54.5 days = 160.9 daysi.Total asset turnover = Sales ÷ Average total assets*= $1,330,000 ÷ $1,311,500 = 1.01 (rounded) *Average total assets = ($1,323,000 + $1,300,000) ÷ 2 = $1,311,500