A recent balance sheet of Sweet as Sugar included the following items, among others. (Dollar amounts are stated in thousands.)
Cash | $ 49,630 |
Marketable securities (short-term) | 65,910 |
Accounts receivable | 25,330 |
Inventories | 44,000 |
Prepaid expenses | 5,850 |
Retained earnings | 350,000 |
Notes payable to banks (due within one year) | 28,000 |
Accounts payable | 4,900 |
Dividends payable.. | 1,800 |
Accrued liabilities (short-term) | 21,500 |
Income taxes payable | 8,500 |
The company also reported total assets of $600,000, total liabilities of $90,000, and a return on total assets of 20.percent.
Instructions
a. Compute Sweet as Sugar’s: (1) quick assets, (2) current assets, and (3) current liabilities.
b. Compute Sweet as Sugar’s: (1) quick ratio, (2) current ratio, (3) working capital, and (4) debt ratio. (Round to one decimal place)
c. Discuss the company’s liquidity from the viewpoints of (1) short-term creditors. (2) long -term creditors, and ( 3) stockholders.
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