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 $465,100 $354,000 Marketable securities 538,600 398,300 Accounts and notes receivable (net) 220,300 132,700 Inventories 1,032,200 683,800 Prepaid expenses 531,800 437,200 Total current assets $2,788,000 $2,006,000 Current liabilities: Accounts and notes payable (short-term) $394,400 $413,000 Accrued liabilities 285,600 177,000 Total current liabilities $680,000 $590,000 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 $fill in the blank 1 $fill in the blank 2 2. Current ratio fill in the blank 3 fill in the blank 4 3. Quick ratio fill in the blank 5 fill in the blank 6 b. The liquidity of Nilo has improved from the preceding year to the current year. The working capital, current ratio, and quick ratio have all increased . Most of these changes are the result of an increase in current assets relative to current liabilities.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 50E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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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	$465,100			$354,000
Marketable securities	538,600			398,300
Accounts and notes receivable (net)	220,300			132,700
Inventories	1,032,200			683,800
Prepaid expenses	531,800			437,200
	Total current assets	$2,788,000			$2,006,000
Current liabilities:
Accounts and notes payable
	(short-term)	$394,400			$413,000
Accrued liabilities	285,600			177,000
	Total current liabilities	$680,000			$590,000

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	$fill in the blank 1	$fill in the blank 2
2. Current ratio	fill in the blank 3	fill in the blank 4
3. Quick ratio	fill in the blank 5	fill in the blank 6

b. The liquidity of Nilo has improved from the preceding year to the current year. The working capital, current ratio, and quick ratio have all increased . Most of these changes are the result of an increase in current assets relative to current liabilities.

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