Retail Ltd operates stores in numerous states. Selected financial statement data (in thousands of dollars) for the year ended 30 June 2019 are as follows:   End of year Beginning of year Cash $8 995 $17 807 Receivables (net) 10 711 15 992 Merchandise inventory 184 872 187 890 Other current assets 3 848 1 624 Total current assets $208 426 $223 313 Total current liabilities $129 941 $169 549 For the year, net sales revenue was $1 109 934 and cost of sales was $628 197 (in thousands). Required Calculate the working capital and current ratio at the beginning of the year and at the end of the current year. Did Retail Ltd’s liquidity improve or worsen during the year?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Calculate liquidity ratios and compare results.LO9

Retail Ltd operates stores in numerous states. Selected financial statement data (in thousands of dollars) for the year ended 30 June 2019 are as follows:

 

End of year

Beginning of year

Cash

$8 995

$17 807

Receivables (net)

10 711

15 992

Merchandise inventory

184 872

187 890

Other current assets

3 848

1 624

Total current assets

$208 426

$223 313

Total current liabilities

$129 941

$169 549

For the year, net sales revenue was $1 109 934 and cost of sales was $628 197 (in thousands).

Required

  1. Calculate the working capital and current ratio at the beginning of the year and at the end of the current year.
  2. Did Retail Ltd’s liquidity improve or worsen during the year?
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