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How has the firms liquidity changed from 2017 to 2016? Compute the current ratio & quick ratio and determine if the firms liquidity has increased
- How has the firms liquidity changed from 2017 to 2016?
-
- Compute the current ratio & quick ratio and determine if the firms liquidity has increased or decreased?
- What are some implications for this result?
- How has the firms long-term solvency changed from 2017 to 2016?
- Compute the debt ratio and determine if the firm has increased or decreased leverage?
- Compute the firms times-interest earned & cash coverage ratio?
- Can the firm easily make their interest payments?
| Table 1: Unilate Textiles: December 31 Comparative Balance Sheets (millions of dollars) | |||||
| 2017 | 2016 | ||||
| Assets | |||||
| Cash and marketable securities | $15.0 | $40.0 | |||
| Accounts receivable | 180.0 | 160.0 | |||
| Inventory | 270.0 | 200.0 | |||
| Total current assets | $465.0 | $400.0 | |||
| Gross plant and equipment | $680.0 | $600.0 | |||
| Less: Accumulated depreciation | (300.0) | (250.0) | |||
| Net plant and equipment | 380.0 | 350.0 | |||
| Total assets | $845.0 | $750.0 | |||
| Liabilities and equity | |||||
| Accounts payable | $30.0 | $15.0 | |||
| Accruals | 60.0 | 55.0 | |||
| Notes payable | 40.0 | 35.0 | |||
| Total current liabilities | $130.0 | $105.0 | |||
| Long-term bonds | 300.0 | 255.0 | |||
| Total liabilities | $430.0 | $360.0 | |||
| Common stock | 130.0 | 130.0 | |||
| Retained earnings | 285.0 | 260.0 | |||
| Owner's equity | $415.0 | $390.0 | |||
| Total liabilities and equity | $845.0 | $750.0 | |||
| NOTE: Unilate has no preferred stock, so owner's equity includes common equity only. | |||||
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Fundamental Accounting Principles Volume II
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
16th Canadian edition
978-1260305838
