Question 5 Selected financial information for Drew Co. is as follows: Current liabilities: Accounts payable Notes payable - current portion 14,460 10,000 Current assets: Cash Accounts Receivable Supplies Prepaid Insurance Total current assets 15,680 7,000 8,320 4,100 35,100 Total current liabilities 24,460 On the Question 5 tab of the Excel file, (a) calculate the working capital, current ratio and quick ratio or acid-test ratio for the year and (b) indicate whether these ratios are better or worse than the industry average. Selected financial information is available at July 31 for Drew Co. 5 8 Current assets: Current liabilities: Cash 15,680 Accounts payable 14,460 Accounts Receivable 7,000 Notes payable - current portion 10,000 Supplies 8,320 9 Prepaid Insurance 4,100 10 Total current assets 35,100 Total current liabilities 24,460 11 12 Calculate working capital, the current ratio, and the acid-test ratio for the year. USE AN EXCEL FORMULA (must show your work). 13 14 Working Capital 15 Current ratio 16 Acid-test ratio : 1 17 18 If the industry averages were as shown below, indicate whether Drew's ratios are better or worse than the industry average. 19 20 $ 12,500 Working Capital Current ratio 21 1.50 :1 Acid-test ratio 0.80 : 1 22 23 24