Current Position AnalysisThe following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous YearCurrent assets: Cash$383,000 $302,400 Marketable securities443,500 340,200 Accounts and notes receivable (net)181,500 113,400 Inventories792,000 614,900 Prepaid expenses408,000 393,100 Total current assets$2,208,000 $1,764,000 Current liabilities: Accounts and notes payable (short-term)$278,400 $294,000 Accrued liabilities201,600 126,000 Total current liabilities$480,000 $420,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place. 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 YearPrevious Year1. Working capital2. Current ratio$3. Quick ratiob. The liquidity of Nilo hasMost of these changes are the result of an$from the preceding year to the current year. The working capital, current ratio, and quick ratio have allin current assets relative to current liabilities.

Working capital :— It is the difference between current assets and current liabilities. Current…

Answered: Current Position Analysis The…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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	$383,000			$302,400
Marketable securities	443,500			340,200
Accounts and notes receivable (net)	181,500			113,400
Inventories	792,000			614,900
Prepaid expenses	408,000			393,100
	Total current assets	$2,208,000			$1,764,000
Current liabilities:
Accounts and notes payable
	(short-term)	$278,400			$294,000
Accrued liabilities	201,600			126,000
	Total current liabilities	$480,000			$420,000

a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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