Calculate and Explain the Current Ratio and Acid Test ratio from the information relating to Olivia Enterprise distributors of Liquid Soap for the period ending March 31st, 2019 Current Assets & Current Liabilities GHC Stocks 2,125 Trade Debtors 3,750 Cash balances 1,350 Trade Creditors 2,025 Other short term liabilities 635 Q2. State and explain four (4) limitations of liquidity ratios calculated above.

Calculate and Explain the Current Ratio and Acid Test ratio from the information relating to Olivia Enterprise distributors of Liquid Soap for the period ending March 31st, 2019 Current Assets & Current Liabilities GHC Stocks 2,125 Trade Debtors 3,750 Cash balances 1,350 Trade Creditors 2,025 Other short term liabilities 635 Q2. State and explain four (4) limitations of liquidity ratios calculated above.

Name: Q1. Calculate and Explain the Current Ratio and Acid Test ratio from t
Uploaded: 2022-11-18T00:26:54.000Z
Channel: Bartleby
Description: Q1. Calculate and Explain the Current Ratio and Acid Test ratio from the information relating to Olivia Enterprise distributors of Liquid Soap for the period ending March 31st, 2019Current Assets & Current LiabilitiesGHCStocks2,125Trade Debtors3,750C

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 7E

See similar textbooks

Related questions

Q: Compute the following ratiosat December 31, 2019: i.Current ratio ii.Acid-test Ratio iii.Account…

A: Ratio analysis: This is the quantitative analysis of financial statements of a business enterprise.…

Q: s income statement for the year ended 31 March 2019 and statements of financial position at 31 March…

Q: Margaret O'Flaherty, a portfolio manager for MCF Investments, is considering investing in Alpine…

A: EBIT = Net Income + Interest + Taxes Total Capitalization= Long term debt + Net worth Funds…

Q: Period Ending: 12/31/2020 12/31/2019 12/31/2018 12/31/2017 Liquidity Ratios Current Ratio…

A: The balance sheet consists of Assets which includes noncurrent assets, Current assets and…

Q: I. Gross profit margin II. Operating profit margin III. Return on equity IV. Current ratio V.…

A: Gross Profit Margin =(Revenue – Cost of Goods Sold) / Revenue x 100, Operating Profit Margin =…

Q: Based on the attached balanced sheet and income statement, Computate the ratios and complete the…

A: (Answers of first 3 parts) Ratio analysis Liquidity Ratios 2021 2020 2019 Industry average…

Q: Baggett Company’s balance sheet accounts and amounts as of December 31, 2019, are shown in random…

A: A balance sheet is a financial statement that illustrates the assets, liabilities, and shareholder…

Q: Choose the correct letter of answer: Company F Statement of Financial Positions at December 31,…

A: Current Ratio = Current assets / Current liabilities Quick Ratio = Quick assets / Current…

Q: PLASMA SCREENS CORPORATION Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current…

A: Ratio analysis is an important technique which helps investors to analyze company's performance in…

Q: AVATAR INDUSTRIES AVATAR INDUSTRIES Comparative Statement of Financial Position Comparative Income…

A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Condensed balance sheet and income statement data for Oriole Corporation are presented here. Oriole…

A: Ratio Analysis -The ratio is the technique used by the prospective investor or an individual or…

Q: Question 2 The financial statements of Avartar Sdn. Bhd., a limited company, for the years ended 31…

A: Since we answer upto three sub-parts we shall answer first three. Please resubmit a new question,…

Q: Indicate how each of the following items would be classified on a statement of financial position…

A: A statement of financial position is also known as the balance sheet. A balance sheet is a statement…

Q: Financial Liquidity

A: Solution The liquidity ratio measures the company's ability to pay the debt obligation. It is…

Q: he following data were taken from Alvarado Company’s balance sheet: OBJ. 6 Dec. 31, 2019 Total…

A: Debt to equity ratio is a financial ratio measuring the relationship of total outside liabilities to…

Q: II. Direction: The following comparative financial statements are provided by ZeUs Company. Using…

A: Horizontal analysis is a method where financial statements are compared over a specific period of…

Q: Using the balance sheet and income statement, complete the ratios on the tab labeled "Ratios" 3.…

A: Note: Since you have asked multiple questions, we will solve the first two questions for you. If you…

Q: Jason Hilton, M.D., reported the following unadjusted trial balance as of September 30, 2025: View…

A: Debt ratio is the ratio between total liabilities and total assets of a company. It is calculated…

Q: The following data were taken from Mesa Company's balance sheet: Dec. 31, 2019 Dec. 31,2018 $518,000…

A: a. Compute the ratio of liabilities to owner's equity

Q: Comment on the following ratios that have been calculated for Mersat Limited. Provide two…

A: Return on assets indicates that the manner in which the company is profitable relative to its assets…

Q: EFFICIENCY Solution and answer Interpretation Total Assets turnover Fixed Asset turnover Inventory…

A: Solution:- Calculation of ratios and interpretations as follows under:- i)Total assets turnover…

Q: The current ratio reflects the relationship between the value of the current assets and the extent…

A: Definition: Current ratio is one type of liquidity ratios, it link between current assets and…

Q: QUESTION 2 Sweets plc is a long-established sweets and confectionery manufacturer. All products are…

A: Ratio Analysis - The ratio is the technique used by the prospective investor or an individual or…

Question

Practice Pack

OFFON

Q1. Calculate and Explain the Current Ratio and Acid Test ratio from the information relating to Olivia Enterprise distributors of Liquid Soap for the period ending March 31st, 2019
Current Assets & Current Liabilities
GHC
Stocks
2,125
Trade Debtors
3,750
Cash balances
1,350
Trade Creditors
2,025
Other short term liabilities
635

Q2. State and explain four (4) limitations of liquidity ratios calculated above.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

Includes step-by-step video

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Learn your way

Includes step-by-step video

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Calculate the following ratios for Avartar Sdn. Bhd. for years ended 31 March 2019 and 31 March2018 6) Gearing ratio; 7) Debt ratio; 8) Interest cover; 9) Current ratio; 10) Quick ratio; Provide the formulas used for calculating the ratios and all workings should be shown clearly.
A Preparation of Ratios Refer to the financial statements for Burch Industries in Problem 12-89A and the following data. Required: 1. Prepare all the financial ratios for Burch for 2019 and 2018 (using percentage terms where appropriate and rounding all answers to two decimal places). 2. CONCEPTUAL CONNECTION Explain whether Burchs short-term liquidity is adequate. 3. CONCEPTUAL CONNECTION Discuss whether Burch uses its assets efficiently. 4. CONCEPTUAL CONNECTION Determine whether Burch is profitable. 5. CONCEPTUAL CONNECTION Discuss whether long-term creditors should regard Burch as a high-risk or a low-risk firm. 6. Perform a Dupont analysis (rounding to two decimal places) for 2018 and 2019.
Question 1 Mabel is a potter and sells her pottery at stalls that she rents in four tourist information centres across the south of England. Extracts from her financial statements for the years ended 31 December 2021 and 2020 are shown below. Statement of profit or loss for the year ended 31 December: 2021 28,900 |(16,500) 12,400 (3,800) 8,600 |(4,000) 4,600 2020 Revenue 27,200 (14,000) 13,200 (3,600) 9,600 Cost of sales Gross profit Operating expenses Operating profit Non-operating expenses Net profit 9,600 Statement of financial position as at 31 December: 2021 Non-current assets Current assets Total assets 22,660 4,360 27,020 2020 20,920 3,750 24,670 Equity Non-current liabilities Current liabilities Equity and liabilities 20,940 3,000 3,080 27,020 16,340 3,500 4,830 24,670 The following information is also relevant: In July 2021 the rent on one of Mabel's stalls was increased significantly for the third time in three years so she decided not to renew the annual contract. She sold…
Comment on the following ratios that have been calculated for Mersat Limited. Provide two significant comments for each. Ratio 2019 2018 4.2.1 Return on assets 23.15% 20.25% 4.2.2 Creditors payment period 68.32 days 59.56 days 4.2.3 Acid test ratio 2.36:1 0.87:1
Margaret O'Flaherty, a portfolio manager for MCF Investments, is considering investing in Alpine Chemical 7% bonds, which mature in 10 years. She asks you to analyze the company to determine the riskiness of the bonds. Alpine Chemical Company Financial Statements Years Ended December 31, ($ in millions) 20X1 20X2 20X3 20X4 20X5 20X6 Assets Cash $ 55 $ 1,637 2,021 190 $ 2,143 1,293 157 249 $ 1,394 1,258 3,493 1,322 Accounts receivable 3,451 1,643 2,087 Inventories 945 Other current assets 17 27 55 393 33 171 5,097 6,181 Current assets 3,114 5,038 2,543 2,495 3,986 5,757 3,138 3,865 2,707 5,619 2,841 2,778 5,265 4,650 2,177 2,473 Gross fixed assets 7,187 3,893 3,465 2,716 Less: Accumulated depreciation Net fixed assets 2,619 3,294 Total assets $6,338 $5,609 $5,485 $6,605 $7,813 $8,559 Liabilities and net worth Notes payable Accounts payable $1,300 338 $ 525 2$ 750 $1,750 $1,900 673 638 681 743 978 Accrued liabilities 303 172 359 359 483 761 Current liabilities 1,501 1,985 1,997 1,457…
a. Given the ratios for 2020 as follows debtor's collection period=46days stock days on hand=60days creditors payment period =46.34 days Total debt ratio=35% Show how the above were calculated b. Suggest ways to improve the financial ratios.
Compute the following ratiosat December 31, 2019: i.Current ratio ii.Acid-test Ratio iii.Account Receivables Turnover iv.Average collection period v.Inventory Turnover vi.Days in inventory vii.Profit margin viii.Debts to Asset ratio ix.Return on Assets x.Times Interest Earned
View the financial ratios, and write a 100 word minimum analysis in complete sentences interpreting at least one ratio from each category provided. (i.e. select at least one liquidity ratio and one profitability ratio to interpret) Period Ending: 12/31/2020 12/31/2019 12/31/2018 12/31/2017 Liquidity Ratios Current Ratio 188% 113% 83% 86% Quick Ratio 159% 80% 52% 56% Cash Ratio 136% 59% 39% 46% Profitability Ratios Gross Margin 21% 17% 19% 19% Operating Margin 6% 0% 0% 0% Pre-Tax Margin 4% 0% 0% 0% Profit Margin 2% 0% 0% 0% Pre-Tax ROE 5% 0% 0% 0% After Tax ROE 3% 0% 0% 0%
Please do not give solution in image format and show all calculation thanku
Need assistance with (a) (4) through (7)
Pls answer the all questions with solutions. Thank you
Calculate the following ratios and interpret the results: (Use the information attached with the paper). Debt to Capitalization ratio Acid test ratio Inventory turnover ratio (in days) Times interest earned ratio