Question
Liquidity management Bauman Company's total current assets, total current liabilities, and inventory for each of the past 4 years follow: Item 2012 2013 2014 2015
Liquidity managementBauman Company's total current assets, total current liabilities, and inventory for each of the past 4 years follow:
Item | 2012 | 2013 | 2014 | 2015 |
Total current assets | $17,370 | $21,850 | $22,930 | $26,290 |
Total current liabilities | 8,880 | 12,140 | 13,250 | 17,480 |
Inventory | 5,770 | 6,870 | 7,690 | 7,110 |
a. Calculate the firm's current and quick ratios for each year. Compare the resulting time series for these measures of liquidity.
b. Comment on the firm's liquidity over the 2012-2015 period.
c. If you were told that Bauman Company's inventory turnover for each year in the 2012-2015 period and the industry averages were as follows, would this information support or conflict with your evaluation in part
(b).Why?
Item | 2012 | 2013 | 2014 | 2015 |
Bauman Company | 6.3 | 6.8 | 7.0 | 6.4 |
Industry Average | 11.3 | 11.9 | 11.5 | 11.7 |
ROUND ALL ANSWERS TWO DECIMAL PLACES
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