Required: a. Calculate the working capital and current ratio at each balance sheet date. b. Evaluate the firm's liquidity at each balance sheet date. c. Assume that the firm operated at a loss during the year ended January 31, 2023. How could cash have increased during the year?

Required: a. Calculate the working capital and current ratio at each balance sheet date. b. Evaluate the firm's liquidity at each balance sheet date. c. Assume that the firm operated at a loss during the year ended January 31, 2023. How could cash have increased during the year?

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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M7 Q1
If during the year a company has high cash flows from its operations, does this meanthat cash on its balance sheet will be higher at the end of the year than it was at thebeginning of the year? Explain.
Finding operating and free cash flows Consider the balance sheets and selected data from the income statement of Keith Corporation that follow. a. Calculate the firm's net operating profit after taxes (NOPAT) for this year. b. Calculate the firm's operating cash flow (OCF) for the year. c. Calculate the firm's free cash flow (FCF) for the year. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c). Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Assets Cash Marketable securities Accounts receivable Inventories Total current assets Gross fixed assets Less: Accumulated depreciation Net fixed assets Total assets Liabilities and Stockholders' Equity Accounts payable Notes payable Accruals Keith Corporation Balance Sheets Total current liabilities Long-term debt Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity December 31 Income…
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