Consider the following information taken from GER's financial statements:   September 30 (in thousands)   2020   2019 Current assets:           Cash and cash equivalents $1,274 $6,450     Receivables 30,071 16,548     Inventories 31,796 14,072     Other current assets 4,818 2,620         Total current assets $67,959 $39,690 Current liabilities:     Current portion of long-term debt $97 $3,530     Accounts payable 23,124 11,228     Accrued compensation costs 5,606 1,929     Accrued expenses 9,108 5,054     Other current liabilities 874 777         Total current liabilities $38,809 $22,518 Also, GER's operating cash flows were $11,255 and $13,736 in 2020 and 2019, respectively. Round your answers to two decimal places.   2.  Calculate the quick ratios for 2020 and 2019.   Quick Ratio 2020 ?? 2019 ?? 3.  Calculate the cash ratios for 2020 and 2019.   Cash Ratio 2020 ?? 2019 ?? 5.  Conceptual Connection: What are some reasons why GER's liquidity may be considered to be improving and some reasons why it may be worsening? GER’s liquidity appears to hold constant when one looks only at the _______ ratio . However, because the ___________  may not be easily converted to cash, the liquidity of GER may be worsening.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Consider the following information taken from GER's financial statements:

  September 30
(in thousands)
  2020   2019
Current assets:      
    Cash and cash equivalents $1,274 $6,450
    Receivables 30,071 16,548
    Inventories 31,796 14,072
    Other current assets 4,818 2,620
        Total current assets $67,959 $39,690
Current liabilities:
    Current portion of long-term debt $97 $3,530
    Accounts payable 23,124 11,228
    Accrued compensation costs 5,606 1,929
    Accrued expenses 9,108 5,054
    Other current liabilities 874 777
        Total current liabilities $38,809 $22,518

Also, GER's operating cash flows were $11,255 and $13,736 in 2020 and 2019, respectively.

Round your answers to two decimal places.

 

2.  Calculate the quick ratios for 2020 and 2019.

  Quick Ratio
2020 ??
2019 ??

3.  Calculate the cash ratios for 2020 and 2019.

  Cash Ratio
2020 ??
2019 ??

5.  Conceptual Connection: What are some reasons why GER's liquidity may be considered to be improving and some reasons why it may be worsening?

GER’s liquidity appears to hold constant when one looks only at the _______ ratio . However, because the ___________  may not be easily converted to cash, the liquidity of GER may be worsening.

 

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