You are a credit analyst of a growing commercial bank and have recently received loan applications from two companies of relatively similar size. Show below are selected financial data for these two applicants at the end of the current year: RED CO BLUE CO. Net credit sales P700,000.00 P650,000.00 Cost of goods sold P500,000.00 P490,000.00 Cash P60,000.00 P20,000.00 Accounts receivable (net) P77,000.00 P60,000.00 Inventory P94,000.00 P180.000.00 Current liabilities P110|200.00 P105,000.00 Assume that the year-end balances for accounts receivable and for inventory approximate the average balances of these items throughout the year. A. Compute the following on BLUE 1. Working capital 2. Current ratio 3. Acid test ratio

You are a credit analyst of a growing commercial bank and have recently received loan applications from two companies of relatively similar size. Show below are selected financial data for these two applicants at the end of the current year: RED CO BLUE CO. Net credit sales P700,000.00 P650,000.00 Cost of goods sold P500,000.00 P490,000.00 Cash P60,000.00 P20,000.00 Accounts receivable (net) P77,000.00 P60,000.00 Inventory P94,000.00 P180.000.00 Current liabilities P110|200.00 P105,000.00 Assume that the year-end balances for accounts receivable and for inventory approximate the average balances of these items throughout the year. A. Compute the following on BLUE 1. Working capital 2. Current ratio 3. Acid test ratio

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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