Question
The owner of Maxx Games is becoming concerned about the liquidity of the business. The following data has been provided for the year ended 30
The owner of Maxx Games is becoming concerned about the liquidity of the business. The following data has been provided for the year ended 30 June.
| 2017 | 2018 | 2019 | |
| Inventory Turnover | 29 DAYS | 35 DAYS | 45 DAYS |
| Working Capital Ratio | 1.5:1 | 1.1:1 | 0.8:1 |
| Quick Asset Ratio | 2.3:1 | 2:3:1 | 2.3:1
|
The owner does not understand how the Working Capital Ratio can be declining whicvle the Quick Asset Ratio is not.
Provide an explanation
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
The Outsourcing Dilemma Whats Best For Internal Auditing
Authors: Larry E. Rittenberg, Institute Of Internal Auditors Research Foundation, Lee A. Campbell
1st Edition
0894133845, 978-0894133848
