Current Position Analysis
The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:
Current Year | Previous Year | |||||||
Current assets: | ||||||||
Cash | $336,300 | $244,800 | ||||||
Marketable securities | 389,400 | 275,400 | ||||||
Accounts and notes receivable (net) | 159,300 | 91,800 | ||||||
Inventories | 739,900 | 466,600 | ||||||
Prepaid expenses | 381,100 | 298,400 | ||||||
Total current assets | $2,006,000 | $1,377,000 | ||||||
Current liabilities: | ||||||||
Accounts and notes payable | ||||||||
(short-term) | $342,200 | $357,000 | ||||||
Accrued liabilities | 247,800 | 153,000 | ||||||
Total current liabilities | $590,000 | $510,000 |
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
Current Year | Previous Year | |||||
1. Working capital | $ | $ | ||||
2. Current ratio | ||||||
3. Quick ratio |
b. The liquidity of Nilo has from the preceding year to the current year. The working capital, current ratio, and quick ratio have all . Most of these changes are the result of an in current assets relative to current liabilities.
Current Year | Previous Year | ||
1 | Working Capital | ||
(Current Assets - Current Liabilities) | |||
Current Assets | |||
Cash | 336,300 | 244,800 | |
Marketable securities | 389,400 | 275,400 | |
Accounts and notes receivable (net) | 159,300 | 91,800 | |
Inventories | 739,900 | 466,600 | |
Prepaid Expense | 381,100 | 298,400 | |
Total current assets | 2,006,000 | 1,377,000 | |
Current Liabilities | |||
Accounts and notes payable | 342,200 | 357,000 | |
Accrued liabilities | 247,800 | 153,000 | |
Total current liabilities | 590,000 | 510,000 | |
Working capital | 1,416,000 | 867,000 | |
2 | Current ratio | 3.40 | 2.70 |
(Current Asset/Current Liabilities) | |||
3 | Quick ratio | 1.50 | 1.20 |
[(Current Asset - Inventory - Prepaid Exp)/Current Liabilities)] | |||
Current Position Analysis The following data were taken from the balance sheet of Nilo Company at...
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