**Working Capital and Current Ratio**The following are the current assets and current liabilities for Konex Properties Company:**20Y9**- Current assets: $796,400- Current liabilities: $362,000**20Y8**- Current assets: $929,600- Current liabilities: $332,000**a. Determine the working capital and current ratio for 20Y9 and 20Y8.***If required, round "current ratio" answers to two decimal places.*| | 20Y9 | 20Y8 ||------------|------------|-----------|| Working capital | $434,400 | $597,600 || Current ratio | 2.2 | 2.8 |**b. Is the change in the current ratio from 20Y8 to 20Y9 favorable or unfavorable?*** UnfavorableThis analysis shows that while the working capital is positive for both years, there has been a decrease in both working capital and current ratio from 20Y8 to 20Y9, indicating a less favorable financial position in 20Y9.

The ratio analysis helps to analyse the financial statements of the business on the basis of various…

Working Capital and Current Ratio Current assets and current liabilities for Konex Properties Properties Company follow: 20Y9 $796,400 362,000 Current assets Current liabilities a. Determine the working capital and current ratio for 20Y9 and 20Y8. If required, round "current ratio" answers to two decimal places. Working capital Current ratio 20Y9 434,400 20Y8 $929,600 332,000 2.2 20Y8 597,600 2.8 b. Is the change in the current ratio from 20Y8 to 20Y9 favorable or unfavorable? Unfavorable

Working Capital and Current Ratio Current assets and current liabilities for Konex Properties Properties Company follow: 20Y9 $796,400 362,000 Current assets Current liabilities a. Determine the working capital and current ratio for 20Y9 and 20Y8. If required, round "current ratio" answers to two decimal places. Working capital Current ratio 20Y9 434,400 20Y8 $929,600 332,000 2.2 20Y8 597,600 2.8 b. Is the change in the current ratio from 20Y8 to 20Y9 favorable or unfavorable? Unfavorable

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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Question

**Working Capital and Current Ratio**

The following are the current assets and current liabilities for Konex Properties Company:

**20Y9**
- Current assets: $796,400
- Current liabilities: $362,000

**20Y8**
- Current assets: $929,600
- Current liabilities: $332,000

**a. Determine the working capital and current ratio for 20Y9 and 20Y8.**

*If required, round "current ratio" answers to two decimal places.*

| | 20Y9 | 20Y8 |
|------------|------------|-----------|
| Working capital | $434,400 | $597,600 |
| Current ratio | 2.2 | 2.8 |

**b. Is the change in the current ratio from 20Y8 to 20Y9 favorable or unfavorable?**

* Unfavorable

This analysis shows that while the working capital is positive for both years, there has been a decrease in both working capital and current ratio from 20Y8 to 20Y9, indicating a less favorable financial position in 20Y9.

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