A small audio equipment retailer has just completed the second year of trading. Profits are up, but

Question:

A small audio equipment retailer has just completed the second year of trading. Profits are up, but the manager is slightly concerned. She feels that the firm could face liquidity problems in the near future. The data for this claim are as follows: image text in transcribed

(a) Calculate the current ratio and liquidity ratio based on the above data.

(b) Should the manager be concerned with the liquidity position? Give a balanced argument.

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Accounting For Non Accountants

ISBN: 9780749465971

9th Edition

Authors: David Horner

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Question Posted: Jan 31, 2024 03:05 AM

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A small audio equipment retailer has just completed the second year of trading. Profits are up, but

Question:

As at 31 December: Inventory Trade receivables Bank Trade payables Bank overdraft 2015 12,470 6,662 3,200 9,310 2016 7,568 10,121 8,980 3,434

Step by Step Answer:

a Current ratio Acid test ratio 2015 24 11 2016 14 08 b Arguments w...View the full answer

Accounting For Non Accountants

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