Question
Frank Wright runs a small bakery. He is concerned with the liquidity position of his firm as he has heard that liquidity problems are one
Frank Wright runs a small bakery. He is concerned with the liquidity position of his firm as he has heard that liquidity problems are one of the most frequent explanations for business failure. The following data is available:
| $ | |
|---|---|
| Stock | 14500 |
| Debtors | 8409 |
| Bank | 3200 |
| Creditors | 9310 |
Required
(a) Calculate the current ratio and liquidity (acid test) ratio based on the above data. (b) Give a brief evaluation of the liquidity position of Frank Wright's bakery
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Payroll Accounting 2019
Authors: Bernard J. Bieg, Judith A. Toland
29th Edition
1337619779
