Question
17-3 17-06 Current Position Analysis The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:
17-3 17-06
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 | $387,600 |
|
| $291,200 |
| |||
Marketable securities | 448,800 |
|
| 327,600 |
| |||
Accounts and notes receivable (net) | 183,600 |
|
| 109,200 |
| |||
Inventories | 950,400 |
|
| 729,600 |
| |||
Prepaid expenses | 489,600 |
|
| 466,400 |
| |||
| Total current assets | $2,460,000 |
|
| $1,924,000 |
| ||
Current liabilities: |
|
|
|
|
| |||
Accounts and notes payable |
|
|
| |||||
| (short-term) | $348,000 |
|
| $364,000 |
| ||
Accrued liabilities | 252,000 |
|
| 156,000 |
| |||
| Total current liabilities | $600,000 |
|
| $520,000 |
|
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 | $ | $ | ||||
2. Current ratio |
|
| ||||
3. Quick ratio |
|
|
b. The liquidity of Nilo has
from the preceding year to the current year. The working capital, current ratio, and quick ratio have all
. Most of these changes are the result of an
in current assets relative to current liabilities.
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