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he following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous Year Current
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he 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 $524,400 $436,800 Marketable securities 607,200 491,400 Accounts and notes receivable (net) 248,400 163,800 Inventories 316,800 95,200 Prepaid expenses 163,200 60,800 Total current assets $1,860,000 $1,248,000 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 DECLINED OR IMPROVED? from the preceding year to the current year. The working capital, current ratio, and quick ratio have all INCREASED OR DECREASED? . Most of these changes are the result of an INCREASE OR DECREASE? in current assets relative to current liabilities
he 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 | $524,400 | $436,800 | ||||||
Marketable securities | 607,200 | 491,400 | ||||||
Accounts and notes receivable (net) | 248,400 | 163,800 | ||||||
Inventories | 316,800 | 95,200 | ||||||
Prepaid expenses | 163,200 | 60,800 | ||||||
Total current assets | $1,860,000 | $1,248,000 | ||||||
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 DECLINED OR IMPROVED? from the preceding year to the current year. The working capital, current ratio, and quick ratio have all INCREASED OR DECREASED? . Most of these changes are the result of an INCREASE OR DECREASE? in current assets relative to current liabilities
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