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 $308,600 $240,000 Marketable securities 357,300 270,000 Accounts and notes receivable (net) 146,100 90,000 Inventories 689,000 427,000 Prepaid expenses 355,000 273,000 Total current assets $1,856,000 $1,300,000 Current liabilities: Accounts and notes payable (short-term) $336,400 $350,000 Accrued liabilities 243,600 150,000 Total current liabilities $580,000 $500,000 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 from the preceding year to the current year. The working capital, current ratio, and quick ratio have all . Most of these changes are the result of an in current assets relative to current liabilities.

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	$308,600			$240,000
Marketable securities	357,300			270,000
Accounts and notes receivable (net)	146,100			90,000
Inventories	689,000			427,000
Prepaid expenses	355,000			273,000
	Total current assets	$1,856,000			$1,300,000
Current liabilities:
Accounts and notes payable
	(short-term)	$336,400			$350,000
Accrued liabilities	243,600			150,000
	Total current liabilities	$580,000			$500,000

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 from the preceding year to the current year. The working capital, current ratio, and quick ratio have all . Most of these changes are the result of an in current assets relative to current liabilities.

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