The ratios in the table below are calculated using the information from CiM's financial statements presented in the case. Complete the last column of the table, to indicate, for each ratio, whether the trend indicates increasing or decreasing liquidity? Liquidity Ratios Year 1 Year 2 Year 3 Increasing or Decreasing Liquity? Quick Ratio 0.83 0.72 0.64 Current Ratio 2.17 1.58 1.37 # Receivables Turns 12,36 12.74 # Inventory Turns 3.33 3.83 4.04 10.18 5.41 4.33 # Payables Turns DRO 29.54 28.64 27.63 DIO 109.61 95.30 90.39 DPO 35.84 67.42 84.34 13.21 CCC 103.3 56.5 33.7 What does "increasing liquidity" mean? What about "decreasing liquidity"?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The ratios in the table below are calculated using the information from CiM's financial statements
presented in the case. Complete the last column of the table, to indicate, for each ratio, whether the trend
indicates increasing or decreasing liquidity?
Liquidity Ratios Year 1 Year 2
Year 3 Increasing or Decreasing Liquity?
Quick Ratio
0.83
0.72
0.64
Current Ratio
DRO
# Receivables Turns 12,36 12.74
# Inventory Turns 3.33 3.83 4.04
# Payables Turns
10.18 5.41 4.33
29.54 28.64
27.63
109.61 95.30 90.39
35.84 67.42 84.34
DIO
DPO
2.17
CCC
1.58 1.37
13.21
103.3 56.5 33.7
What does "increasing liquidity" mean? What about "decreasing liquidity"?
Transcribed Image Text:The ratios in the table below are calculated using the information from CiM's financial statements presented in the case. Complete the last column of the table, to indicate, for each ratio, whether the trend indicates increasing or decreasing liquidity? Liquidity Ratios Year 1 Year 2 Year 3 Increasing or Decreasing Liquity? Quick Ratio 0.83 0.72 0.64 Current Ratio DRO # Receivables Turns 12,36 12.74 # Inventory Turns 3.33 3.83 4.04 # Payables Turns 10.18 5.41 4.33 29.54 28.64 27.63 109.61 95.30 90.39 35.84 67.42 84.34 DIO DPO 2.17 CCC 1.58 1.37 13.21 103.3 56.5 33.7 What does "increasing liquidity" mean? What about "decreasing liquidity"?
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