Question
The following is extracted financial balances of Nolan E-Corp Ltd over the past 3 years. 202020192018Current ratio2.5:12:11.3:1Quick ratio0.5:10.9:11.4:1Account receivable turnover7.2 times8.4 times6.8 timesInventory turnover6.1 times7.3
The following is extracted financial balances of Nolan E-Corp Ltd over the past 3 years.
202020192018Current ratio2.5:12:11.3:1Quick ratio0.5:10.9:11.4:1Account receivable turnover7.2 times8.4 times6.8 timesInventory turnover6.1 times7.3 times7.6 timesSales as a % of 2015 base year142%121%100%
Based on the information above, you are required to answer each of the following questions using the data above andexplainyour reasoning for each answer.
Has the balance in Nolan E-Corp Ltd's accounts receivable been increasing, decreasing or staying constant?
Has the amount carried in Nolan E-Corp Ltd's inventory increased, decreased or stayed constant since 2018?
You may use the following formula for your calculation
CurrentRatio =CurrentAssets /CurrentLiabilities
Quick Ratio = (Cash assets + Receivables)/Current Liabilities
Account receivable Turnover = Total credit sales /Closing Accounts receivable
Inventory Turnover = Total Cost of Sales /Closing Inventory
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