The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:Please see the attachment for details:a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.b. What conclusions can be drawn from these data as to the company’s abilityto meet its currently maturing debts? Current YearPrevious YearCurrent assets:$ 320,000$ 414,000CashMarketable securities496,800336,000Accounts and notes receivable (net)619,200464,000272,000Inventories351,900Prepaid expenses188,100208,000Total current assets$2,070,000$1,600,000Current liabilities:$ 675,000$ 600,000Accounts and notes payable (short-term)Accrued liabilities225,000200,000$ 800,000$ 900,000Total current liabilities

Answered: Current Year Previous Year Current…

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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The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:

Please see the attachment for details:

a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
b. What conclusions can be drawn from these data as to the company’s ability
to meet its currently maturing debts?

Current Year
Previous Year
Current assets:
$ 320,000
$ 414,000
Cash
Marketable securities
496,800
336,000
Accounts and notes receivable (net)
619,200
464,000
272,000
Inventories
351,900
Prepaid expenses
188,100
208,000
Total current assets
$2,070,000
$1,600,000
Current liabilities:
$ 675,000
$ 600,000
Accounts and notes payable (short-term)
Accrued liabilities
225,000
200,000
$ 800,000
$ 900,000
Total current liabilities

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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