Nestles financial statements are presented in Appendix B. Financial statements of Zetar are presented in Appendix C.

Question:

Instructions
(a) At the end of the most recent fiscal year reported, what was Nestles largest current liability account? What were its total current liabilities? What was Zetar’s largest current liability account? What were its total current liabilities?
(b) Based on information contained in those financial statements, compute the following for each company for the most recent fiscal year reported.
(1) Working capital.
(2) Current ratio.
(c) What conclusions concerning the relative liquidity of these companies can be drawn from these data?
(d) Based on the information contained in those financial statements, compute the following ratios for each company for the most recent fiscal year reported.
(1) Debt to total assets.
(2) Times interest earned.
(e) What conclusions concerning the companies’ long-run solvency can be drawn from these ratios?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Solvency
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...