Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous Year Current
The 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 | $396,700 | $320,000 | ||||||
Marketable securities | 459,400 | 360,000 | ||||||
Accounts and notes receivable (net) | 187,900 | 120,000 | ||||||
Inventories | 382,800 | 244,000 | ||||||
Prepaid expenses | 197,200 | 156,000 | ||||||
Total current assets | $1,624,000 | $1,200,000 | ||||||
Current liabilities: | ||||||||
Accounts and notes payable | ||||||||
(short-term) | $336,400 | $350,000 | ||||||
Accrued liabilities | 243,600 | 150,000 | ||||||
Total current liabilities | $580,000 | $500,000 |
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 from the preceding year to the current year. The working capital, current ratio, and quick ratio have all . Most of these changes are the result of an in current assets relative to current liabilities.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started