Current ratio The financial ratio which evaluates the ability of a company to pay off the debt obligations which mature within one year, or within completion of the operating cycle, is referred to as current ratio. This ratio assesses the liquidity of a company. Formula of current ratio: Current ratio = Current assets Current liabilities Accounts receivable turnover: Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In other words, it indicates the number of times the average amount of net accounts receivables collected during a particular period. To identify: Whether Incorporation M’s short-term liquidity position improving or deteriorating in 2017.

Question

Want to see the full answer?

Answer 1

Question

Chapter 8, Problem 8.15E

(a)

To determine

Current ratio

The financial ratio which evaluates the ability of a company to pay off the debt obligations which mature within one year, or within completion of the operating cycle, is referred to as current ratio. This ratio assesses the liquidity of a company.

Formula of current ratio:

Current ratio = Current assetsCurrent liabilities

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In other words, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

To identify: Whether Incorporation M’s short-term liquidity position improving or deteriorating in 2017.

(b)

To determine

To identify: Whether changes in turnover ratios affect profitability.

(c)

To determine

To describe: The ways to improve Incorporation M’s receivables and inventory turnover ratio.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Problem related to Accounting

Provide correct answer

What is mistry's manufacturing overhead budget variance

Answer 2

Question

Chapter 8, Problem 8.15E

(a)

To determine

Current ratio

The financial ratio which evaluates the ability of a company to pay off the debt obligations which mature within one year, or within completion of the operating cycle, is referred to as current ratio. This ratio assesses the liquidity of a company.

Formula of current ratio:

Current ratio = Current assetsCurrent liabilities

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In other words, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

To identify: Whether Incorporation M’s short-term liquidity position improving or deteriorating in 2017.

(b)

To determine

To identify: Whether changes in turnover ratios affect profitability.

(c)

To determine

To describe: The ways to improve Incorporation M’s receivables and inventory turnover ratio.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 8, Problem 8.15E

(a)

To determine

Current ratio

The financial ratio which evaluates the ability of a company to pay off the debt obligations which mature within one year, or within completion of the operating cycle, is referred to as current ratio. This ratio assesses the liquidity of a company.

Formula of current ratio:

Current ratio = Current assetsCurrent liabilities

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In other words, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

To identify: Whether Incorporation M’s short-term liquidity position improving or deteriorating in 2017.

(b)

To determine

To identify: Whether changes in turnover ratios affect profitability.

(c)

To determine

To describe: The ways to improve Incorporation M’s receivables and inventory turnover ratio.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 8, Problem 8.15E

(a)

To determine

Current ratio

The financial ratio which evaluates the ability of a company to pay off the debt obligations which mature within one year, or within completion of the operating cycle, is referred to as current ratio. This ratio assesses the liquidity of a company.

Formula of current ratio:

Current ratio = Current assetsCurrent liabilities

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In other words, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

To identify: Whether Incorporation M’s short-term liquidity position improving or deteriorating in 2017.

(b)

To determine

To identify: Whether changes in turnover ratios affect profitability.

(c)

To determine

To describe: The ways to improve Incorporation M’s receivables and inventory turnover ratio.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 8, Problem 8.15E

(a)

To determine

Current ratio

The financial ratio which evaluates the ability of a company to pay off the debt obligations which mature within one year, or within completion of the operating cycle, is referred to as current ratio. This ratio assesses the liquidity of a company.

Formula of current ratio:

Current ratio = Current assetsCurrent liabilities

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In other words, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

To identify: Whether Incorporation M’s short-term liquidity position improving or deteriorating in 2017.

(b)

To determine

To identify: Whether changes in turnover ratios affect profitability.

(c)

To determine

To describe: The ways to improve Incorporation M’s receivables and inventory turnover ratio.

Answer 6

Chapter 8, Problem 8.15E

(a)

To determine

Current ratio

The financial ratio which evaluates the ability of a company to pay off the debt obligations which mature within one year, or within completion of the operating cycle, is referred to as current ratio. This ratio assesses the liquidity of a company.

Formula of current ratio:

Current ratio = Current assetsCurrent liabilities

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In other words, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

To identify: Whether Incorporation M’s short-term liquidity position improving or deteriorating in 2017.

Answer 7

Chapter 8, Problem 8.15E

(a)

To determine

Current ratio

The financial ratio which evaluates the ability of a company to pay off the debt obligations which mature within one year, or within completion of the operating cycle, is referred to as current ratio. This ratio assesses the liquidity of a company.

Formula of current ratio:

Current ratio = Current assetsCurrent liabilities

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is calculated by dividing the net credit sales by the average amount of net accounts receivables. In other words, it indicates the number of times the average amount of net accounts receivables collected during a particular period.

To identify: Whether Incorporation M’s short-term liquidity position improving or deteriorating in 2017.

Answer 8

(b)

To determine

To identify: Whether changes in turnover ratios affect profitability.

Answer 9

(b)

To determine

To identify: Whether changes in turnover ratios affect profitability.

Answer 10

(c)

To determine

To describe: The ways to improve Incorporation M’s receivables and inventory turnover ratio.

Answer 11

(c)

To determine

To describe: The ways to improve Incorporation M’s receivables and inventory turnover ratio.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 15

Ch. 8 - What is the difference between an account...Ch. 8 - What are some common types of receivables other...Ch. 8 - What are the essential features of the allowance...Ch. 8 - Prob. 4Q Ch. 8 - Prob. 5Q Ch. 8 - Prob. 6Q Ch. 8 - Prob. 7Q Ch. 8 - Tawnya Dobbs, the vice president of sales for...Ch. 8 - Prob. 9Q Ch. 8 - Prob. 10Q

Solution Summary: The author explains the current ratio of Incorporation M, which assesses the liquidity of a company.

Videos

To identify: Whether changes in turnover ratios affect profitability.

To describe: The ways to improve Incorporation M’s receivables and inventory turnover ratio.

Want to see the full answer?

Chapter 8 Solutions