Question
1.From the two years balance sheet, we get the Companys Working Capital, Current Ratio, and Acid-Test (Quick) Ratio :(chart below) 2.Based upon the results of
1.From the two years balance sheet, we get the Companys Working Capital, Current Ratio, and Acid-Test (Quick) Ratio :(chart below)
2.Based upon the results of your analysis in 1. above, assess the Companys overall liquidity position. Explain which ratio indicates particular strengths and/or weaknesses. Assume the following industry averages:
Working Capital will vary in proportion to the size of the firm
Current Ratio is 2.00
Acid-Test (Quick) Ratio is 1.60
3. Explain how Working Capital and Current Ratio are related. Would you expect firms with large amounts of Working Capital to always have high Current Ratios?
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A Concise Course On Auditing An Authoritative Text For Stakeholders
Authors: Onyuka Felix McDubus
1st Edition
3844395415, 978-3844395419
