Nair Company's total current assets, total current liabilities and inventory for each of the past 4 years follows: Item 2003 2004 2005 2006 Total current assets Rs. 16950 Rs. 21900 Rs. 22500 Rs. 27000 Total current liabilities 9000 12600 12600 17400 Inventory 6000 6900 6900 7200 Requirement: 1. Calculate the firm's current and quick ratios for each year. Ratio 2003 2004 2005 2006 Page 1 of 2 Current Ratio Quick Ratio 2. Comment on the firm's liquidity over the 2003-2006 period. 3. If you were told that Nair Company's inventory turnover for each year in the 2003-2006 period and the industry average were as follow, would this information support or conflict with your evaluation in part 2? Why? Inventory Turnover 2003 2004 2005 2006 Nair Company 6.3 6.8 7.0 6.4 Industry Average 10.6 11.2 10.8 11.0

Nair Company's total current assets, total current liabilities and inventory for each of the past 4 years follows: Item 2003 2004 2005 2006 Total current assets Rs. 16950 Rs. 21900 Rs. 22500 Rs. 27000 Total current liabilities 9000 12600 12600 17400 Inventory 6000 6900 6900 7200 Requirement: 1. Calculate the firm's current and quick ratios for each year. Ratio 2003 2004 2005 2006 Page 1 of 2 Current Ratio Quick Ratio 2. Comment on the firm's liquidity over the 2003-2006 period. 3. If you were told that Nair Company's inventory turnover for each year in the 2003-2006 period and the industry average were as follow, would this information support or conflict with your evaluation in part 2? Why? Inventory Turnover 2003 2004 2005 2006 Nair Company 6.3 6.8 7.0 6.4 Industry Average 10.6 11.2 10.8 11.0

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Description: Nair Company's total current assets, total current liabilities and inventory for each of the past 4 years follows:Item2003200420052006Total current assetsRs. 16950Rs. 21900Rs. 22500Rs. 27000Total current liabilities9000126001260017400Inventory600069

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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