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WGU C201 Business Acumen Chapter 15 & 16: Accounting and Financial Statements – Ratios $7.99   Add to cart
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WGU C201 Business Acumen Chapter 15 & 16: Accounting and Financial Statements – Ratios
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Current assets / current liabilities Current Ratio Current assets - minus inventory / current liabilities Acid Test (Quick) Ratio Current assets $250 Inventory $20 Current Liabilities $100 250-20=230 230/100=2.2 $2.20 assets for every $1 in liabilities Acid Test (Quick) Ratio and Current Ra...

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  • November 28, 2023
  • 2
  • 2023/2024
  • Exam (elaborations)
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  • wgu c201 business acumen chapter 15 16 accounti

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  • WGU C201
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WGU C201 Business Acumen Chapter 15
& 16: Accounting and Financial
Statements – Ratios
Current assets / current liabilities ✔✔Current Ratio


Current assets - minus inventory / current liabilities ✔✔Acid Test (Quick) Ratio
Current assets $250
Inventory $20
Current Liabilities $100
250-20=230
230/100=2.2
$2.20 assets for every $1 in liabilities


Acid Test (Quick) Ratio and Current Ratio ✔✔Liquidity Ratios


Inventory Turnover, Receivables Turnover, and Total Asset Turnover ✔✔Activity Ratios


Cost of goods sold / average inventory ✔✔Inventory Turnover.
Equals the number of times inventory moves through a business.
Cost of Goods Sold $200,000
Average Inventory $20,000
200000/20000 = 10
Compare these to industry averages for industry.


Credit sales / average accounts receivable ✔✔Receivables Turnover


Sales / Average Total Assets ✔✔Total Asset Turnover.
Equals how much sales each dollar invested in assets generates.

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