14.12A Turnbull Taffy Limited's figures to 31 March 20X4 show the following working capital items: Stock
Question:
14.12A Turnbull Taffy Limited's figures to 31 March 20X4 show the following working capital items:
£
Stock 67 400 Debtors 42 660 Cash at bank 6 050 Trade creditors 58 760 The company's finance director is preparing a projected balance sheet for 31 March 20X5 as part of a package of information to be presented to a bank from which the company hopes to obtain a long-term loan. The finance director estimates that there will be the following changes to working capital between 31 March 20X4 and 31 March 20X5:
Stock will decrease by 10%
Debtors will decrease by 15%
Cash at bank will increase by 50%
Trade creditors will decrease by 5%.
Calculate (to two decimal places):
i) The current ratio and the quick ratio at 31 March 20X4.
ii) The expected current ratio and quick ratio at 31 March 20X5 based on the finance director's estimates.
Step by Step Answer:
Business Accounting And Finance For Non Specialists
ISBN: 9781861528728
1st Edition
Authors: Catherine Gowthorpe