Part I (1) What is the current ratio and what does it mean? How is it calculated? (2) Please use the information below to calculate the current ratio for Niles Co. for 20Y4 and 20Y3. Round your answers to one decimal place. 20Y4 20Y3 Cash $ 414,000 $ 320,000 Marketable securities 496,800 336,000 Accounts receivable 649,200 464,000 Inventories 351,900 272,000 Prepaid expenses 188,100 208,000 Land 820,000 820,000 Buildings 695,000 695,000 Equipment 230,500 180,200 Total Assets $ 3,845,500 $ 3,295,200 Accounts payable $ 675,000 $ 600,000 Wages payable 225,000 200,000 Bonds payable (long-term) 500,000 500,000 Total Liabilities $ 1,400,000 $ 1,300,000 Total Equity $ 2,445,500 $ 1,995,200 (3) Interpret your calculations for Niles Co. Explain whether the company's current ratio is more or less favorable in 20Y4 than in 20Y3.
Part I (1) What is the current ratio and what does it mean? How is it calculated? (2) Please use the information below to calculate the current ratio for Niles Co. for 20Y4 and 20Y3. Round your answers to one decimal place. 20Y4 20Y3 Cash $ 414,000 $ 320,000 Marketable securities 496,800 336,000 Accounts receivable 649,200 464,000 Inventories 351,900 272,000 Prepaid expenses 188,100 208,000 Land 820,000 820,000 Buildings 695,000 695,000 Equipment 230,500 180,200 Total Assets $ 3,845,500 $ 3,295,200 Accounts payable $ 675,000 $ 600,000 Wages payable 225,000 200,000 Bonds payable (long-term) 500,000 500,000 Total Liabilities $ 1,400,000 $ 1,300,000 Total Equity $ 2,445,500 $ 1,995,200 (3) Interpret your calculations for Niles Co. Explain whether the company's current ratio is more or less favorable in 20Y4 than in 20Y3.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Part I
(1) What is the
(2) Please use the information below to calculate the current ratio for Niles Co. for 20Y4 and 20Y3. Round your answers to one decimal place.
| 20Y4 | 20Y3 | |
| Cash | $ 414,000 | $ 320,000 |
| Marketable securities | 496,800 | 336,000 |
| 649,200 | 464,000 | |
| Inventories | 351,900 | 272,000 |
| Prepaid expenses | 188,100 | 208,000 |
| Land | 820,000 | 820,000 |
| Buildings | 695,000 | 695,000 |
| Equipment | 230,500 | 180,200 |
| Total Assets | $ 3,845,500 | $ 3,295,200 |
| Accounts payable | $ 675,000 | $ 600,000 |
| Wages payable | 225,000 | 200,000 |
| Bonds payable (long-term) | 500,000 | 500,000 |
| Total Liabilities | $ 1,400,000 | $ 1,300,000 |
| Total Equity | $ 2,445,500 | $ 1,995,200 |
(3) Interpret your calculations for Niles Co. Explain whether the company's current ratio is more or less favorable in 20Y4 than in 20Y3.
(4) What types of people or entities would be most interested in a company's current ratio? Please explain.
Part II
(1) What is a classified
(2) Is classifying a balance sheet more trouble than it's worth?
Please explain your answers and support your position.
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