For Taylor Corporation, the working capital at the end of the current year is $10,000 more...
For Taylor Corporation, the working capital at the end of the current year is $10,000 more than the working capital at the end of the preceding year, reported as follows:
|
Year 2 |
Year 1 |
|
|
Current assets: |
||
|
Cash, marketable securities, and receivables |
$ 80,000 |
$ 84,000 |
|
Inventories |
120,000 |
66,000 |
|
Total current assets |
$200,000 |
$150,000 |
|
Current liabilities |
100,000 |
60,000 |
|
Working capital |
$100,000 |
$ 90,000 |
Has the current position of Taylor Corporation improved? Explain
Homework Answers
current ratio in Year 1 = 150/60 = 2.5
current ratio in Year 2 = 200/100 = 2
so the current ratio has decline indicating weakening in liquidity
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