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Using the Ratio formula table compute the following: Liquidity and Solvency Analysis All users of financial statements are interested in the ability of a company
Using the Ratio formula table compute the following:
Liquidity and Solvency Analysis
All users of financial statements are interested in the ability of a company to do the following :
- maintain Liquidity and solvency
which are normally assessed using the following
- Current position analysis- Working capital, Current ratio and Quick ratio
- Accounts receivable analysis-Accounts Receivable turnover and # of days sales in receivables
- Inventory analysis- Inventory turnover, number of days sales in inventory
- Ratio of Fixed Assets to long term liabilities
- Ratio of Liabilities to Stock holders equity
- Using the information given provide the Current Position analysis (2014 and 2013)
15 points
Working Capital
Current Ratio
Quick ratio
__________________________2014__________________2013______________
Current Assets $550,000 $533,000
Current Liabilities $210,000 $243,000
Quick assets $280,000 $244,700
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