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Amazing Company provides you with the following balance sheet information as of December 31, 2023: Current assets $11,500 Current liabilities $12,000 Long-term 26,500 Long-term
Amazing Company provides you with the following balance sheet information as of December 31, 2023: Current assets $11,500 Current liabilities $12,000 Long-term 26,500 Long-term liabilities 14,000 assets Total assets $38,000 Stockholders' equity 12,000 Total liabilities and $38,000 stockholders' equity Other facts are that Amazing reported net income for 2023 of $16,000, income tax expense of $3,200, and interest expense of $1,300. a. Compute the current ratio and working capital for Amazing for 2023. Be sure to show your work to your colleagues. b. Assume that at the end of 2023, instead of the numbers shown above, Amazing used $3,000 cash to pay off $3,000 of accounts payable. How would the current ratio and working capital have changed? Grind out your numbers, and show your work to your colleagues. c. Compute the debt to assets ratio and the times interest earned ratio for Amazing for 2023. Be sure to show your work. d. Comment about the performance of Amazing, and express any concerns or hopes that you would have for the company going forward. Would you lend money to this company? Why or why not? Please don't say 'it depends' or 'maybe' I want to see your logic here.
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a The current ratio is calculated by dividing current assets by current liabilities Current Ratio Cu...Get Instant Access to Expert-Tailored Solutions
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