Accounting
27th Edition
ISBN: 9781337272094
Author: WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher: Cengage Learning,
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Question
Chapter 17, Problem 17.7EX
a.
To determine
Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company.
To compute: Current and acid-test ratio for current year and previous year.
Given info: Items of current asset and current liabilities.
b.
To determine
To provide: Conclusion towards company’s ratios
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Current Position Analysis
The following data were taken from the balance sheet of Albertini Company at the end of two recent fiscal years:
Current Year
Previous Year
Current assets:
Cash
$506,200
$384,000
Marketable securities
586,100
432,000
Accounts and notes receivable (net)
239,700
144,000
Inventories
928,000
702,700
Prepaid expenses
478,000
449,300
Total current assets
$2,738,000
$2,112,000
Current liabilities:
Accounts and notes payable
(short-term)
$429,200
$448,000
Accrued liabilities
310,800
192,000
Total current liabilities
$740,000
$640,000
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
Current Year
Previous Year
1. Working capital
$fill in the blank 1
$fill in the blank 2
2. Current ratio
fill in the blank 3
fill in the blank 4…
Current position analysis
The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:
Current Year Previous Year
Current assets:
Cash
$368,200
$281,600
Marketable securities
126,400
316,000
Accounts and notes receivable (net)
174,400
105,600
Inventories
639,500
402,600
Prepaid expenses
129,500
257,400
Total current
$1,930,000
$1,364,000
Current liabilities:
Accounts and notes payable (short-term)
$295,000
$300,000
Accrued labies
Total current liabilities
214,200
$510,000
132,000
$640,000
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
1. Working capital
2. Current ratio
3. Quick ratio
b. The quidity of Nilo has
result of an
Current Year
Previous Year
from the preceding year to the current year. The working capital, current ratio, and quick ratio have all
Most of these changes are the
in current assets relative to current liabilities.
Current Position Analysis
The following data were taken from the balance sheet of Albertini Company at the end of two recent fiscal years:
Current Year
Previous Year
Current assets:
Cash
$486,400
$392,000
Marketable securities
563,200
441,000
Accounts and notes receivable (net)
230,400
147,000
Inventories
792,000
469,700
Prepaid expenses
408,000
300,300
Total current assets
$2,480,000
$1,750,000
Current liabilities:
Accounts and notes payable
(short-term)
$464,000
$490,000
Accrued liabilities
336,000
210,000
Total current liabilities
$800,000
$700,000
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
Current Year
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$fill in the blank 1
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2. Current ratio
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fill in the blank 4…
Chapter 17 Solutions
Accounting
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