Question#1 - Financial and Management Accounting

Gigantic Products extracted from the company's balance sheet as at 30 June 2015 with the following:

Cash and cash equivalents	$620,000
Investments in marketable securities	$300,000
Receivables	$1,400,000
Inventories	$1,100,000
Prepaid expense and other current assets	$450,000
Plant and equipment	$3,300,000
Accounts payable	$1,600,000
Bank loans payable within one year	$300,000
Income taxes payable	$300,000
Retained earnings	$1,700,000

Industry average:

Current ratio = 2.3: 1

Quick ratio = 1.3: 1

Required:

1a. Calculate the following as at 30 June 2015 (round to the nearest 2 decimal places):

(i) Quick assets

(ii) Current assets

(iii) Current liabilities

(iv) Current ratio

(v) Quick ratio

1b. Based upon your answer in 1a, comment Gigantic Products' performance against the industry average.

1c. Suggest one (1) action Gigantic Products can take to improve the company's current ratio.