Question
Xena has the following working capital ratios: 20X9 20X8 Current ratio 12:1 15:1 Receivables days 75 days 50 days Payables days 30 days 45 days
Xena has the following working capital ratios:
20X9 20X8
Current ratio 12:1 15:1
Receivables days 75 days 50 days
Payables days 30 days 45 days
Inventory turnover 42 days 35 days
Which of the following statements is correct?
A Xenas liquidity and working capital has improved in 20X9
B Xena is receiving cash from customers more quickly in 20X9 than in 20X8
C Xena is suffering from a worsening liquidity position in 20X9
D Xena is taking longer to pay suppliers in 20X9 than in 20X8
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Financial Management Theory And Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
3rd Canadian Edition
017658305X, 978-0176583057
