The following amounts were reported by Moksh Ltd. in its most recent statement of financial position:

The company had sales of $860,000 in 2024 and $740,000 in 2023. All sales were on account.

Required 

a. Calculate the current ratio and quick ratio for Moksh Ltd. for the current and preceding years. Comment on whether the ratios have improved or worsened. 

b. If Moksh’s bank loan includes covenants that the company must maintain a minimum current ratio of 1.5 and a minimum quick ratio of 1.0, what would you advise Moksh’s management to do? 

c. Calculate Moksh’s accounts receivable turnover ratio and average collection period for the current and preceding years. For the accounts receivable turnover ratio, use the balance of accounts receivable at each year end for this calculation, rather than average balances. Comment on whether these ratios have improved or worsened. 

d. If Moksh’s normal credit terms are “n/30,” assess the company’s collection experience for the current and preceding years.

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Cash and cash equivalents Accounts receivable (net) Inventory Prepaid expenses Property, plant, and equipment (net) Accounts payable Wages payable Income tax payable Long-term bank loan payable Common shares Retained earnings 2024 $ 50,000 170,000 480,000 11,000 420,000 230,000 46,000 23,000 380,000 220,000 232,000 2023 $ 79,000 120,000 280,000 5,000 360,000 135,000 32,000 18,000 260,000 220,000 179,000