The following data are from the 2012 financial report of Generic Clothing Company: a. Based upon the
Question:
The following data are from the 2012 financial report of Generic Clothing Company:
a. Based upon the above data, compute the following for Generic Clothing Company for both 2011 and 2012:(1) The current ratio(2) The quick ratiob. Assume that net credit sales for the years ended December 31, 2011, and 2012, were $780,000 and &800,000, respectively, and that the balance of accounts receivable as or January 1, 2012, was $100,000. Compute the receivables turnover and days outstanding for both years.c. Does it appear that the solvency position of the company improved or worsened from 2012 to 2012?Explain.
Solvency Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial...
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2012 2011 Current assets: Cash S 15,00 225,000 90,000 50,00 20.000 S4INI,000 S 30,000 10,000 95,000 Short-term marketable securities Accounts receivable (net) Inventory Prepaid insurance Total current assets 225,000 25,000 S385.000 Current liabilities: S 75,000 10,000 375,000 Accounts payable Wages payable Current portion of long-term debt Total current liabilities S 60,000 10,000 100,000 $460,000 S170,000
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a 1 Current Ratio Current Assets Current Liabilities 2011 385000 170000 226 2012 400000 460000 087 2 ...View the full answer
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