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# Liquidity, Solvency and Profitability

Liquidity, Solvency and Profitability Ratios Liquidity, Solvency and Profitability Ratios)

For each company, compute the following ratios1.  Current Ratio. All 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 sales ALMARAEI Average collection period (in days)= 7525/ 65357 x 365=42.03 days ALSAFI, Inc.=4025/408214 x 365= 3.60 days4.      Inventory turnover Inventory turnover ratio= cost of goods sold/Average inventory ALMARAEI = 65357/ 6942= 6.5663ALSAFI, Inc.= 304657/ 33836= 9.00395.      Days in inventory Days in inventory=Inventory / COGS x 365ALMARAEI= 6942/45583

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