You have been given the following condensed financial data for two companies from different industries: Instructions Divide

Question:

You have been given the following condensed financial data for two companies from different industries:
You have been given the following condensed financial data for

Instructions
Divide the class into groups. Assign half your group members to Utility Corp. and the remaining group members to Retail Co. Ltd. Then do the following:
(a) Calculate the following ratios for 2012:
(1) Current ratio,
(2) Cash current debt coverage,
(3) Debt to total assets, and
(4) Cash total debt coverage.
(b) Assess the company's liquidity and solvency, including the answers to the following questions in your analysis:
1. What liquidity and solvency risk is there for your company?
2. What additional information would you need to make a more detailed analysis?

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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Related Book For  book-img-for-question

Financial Accounting Tools for Business Decision Making

ISBN: 978-1118024492

5th Canadian edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine

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