Question: Using the acid-test ratio, accounts receivable turnover ratio, and days' sales in receivables to evaluate a company Lantana Clothiers reported the following selected items at May 31, 2016 (last year's-2015-amounts also given as needed):
Compute Lantana's
(a) acid-test ratio,
(b) accounts receivable turnover ratio, and
(c) days' sales in receivables for 2016.
Evaluate each ratio value as strong or weak. Lantana sells on terms of net 30. (Round days' sales in receivables to a whole number.)