Question
In: Accounting
Current Position Analysis The following data were taken from the balance sheet of Nilo Company at...
Current Position Analysis
The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:
| Current Year | Previous Year | |||||||
| Current assets: | ||||||||
| Cash | $425,600 | $317,200 | ||||||
| Marketable securities | 492,800 | 356,900 | ||||||
| Accounts and notes receivable (net) | 201,600 | 118,900 | ||||||
| Inventories | 646,800 | 372,100 | ||||||
| Prepaid expenses | 333,200 | 237,900 | ||||||
| Total current assets | $2,100,000 | $1,403,000 | ||||||
| Current liabilities: | ||||||||
| Accounts and notes payable | ||||||||
| (short-term) | $406,000 | $427,000 | ||||||
| Accrued liabilities | 294,000 | 183,000 | ||||||
| Total current liabilities | $700,000 | $610,000 | ||||||
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
| Current Year | Previous Year | |||||
| 1. Working capital | $ | $ | ||||
| 2. Current ratio | ||||||
| 3. Quick ratio | ||||||
b. The liquidity of Nilo has from the preceding year to the current year. The working capital, current ratio, and quick ratio have all . Most of these changes are the result of an in current assets relative to current liabilities.
Solutions
Expert Solution
| a. | Current Year ($) | Previous Year ($) | |||
| Working Capital | 1400000 | 793000 | |||
| Current ratio | 3 times | 2.3 times | |||
| Quick ratio | 1.6 times | 1.3 times | |||
| b. The liquidity of Nilo is Increased from the preceeding year to the current year. | |||||
| The working capital, current ratio and quick ratio all have increased. | |||||
| Most of these changes are the result of an increase in current assets relative to current liabilities. | |||||
| Explanation: | |||||
| Working Capital= | Current assets- Current Liabilities | ||||
| Current year | $ 2100000-700000 | ||||
| 1400000 | |||||
| Previous Year | $ 1403000-610000 | ||||
| 793000 | |||||
| Current Ratio= | Current Assets/ Current Liabilities | ||||
| Current year | $ 2100000/700000 | ||||
| 3 times | |||||
| Previous Year | $ 1403000/610000 | ||||
| 2.3 times | |||||
| Quick Ratio= | Current Assets-Inventory-Prepaid Expenses/ Current Liabilities | ||||
| Current year | $ 2100000-646800-333200/700000 | ||||
| 1.6 times | |||||
| Previous Year | $ 1403000-372100-237900/610000 | ||||
| 1.3 times | |||||
| It is assumed that account receivables are liquid assets. | |||||
ekkarill92 answered 10 months agoRelated Solutions
Current Position Analysis The following data were taken from the balance sheet of Nilo Company at...
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The following data were taken from the balance sheet of Nilo
Company at the end of two recent fiscal years:
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Current assets:
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$307,200
Marketable securities
488,400
345,600
Accounts and notes receivable
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199,800
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Inventories
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Prepaid expenses
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Current liabilities:
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Inventories
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receivable (net) 263,500 166,900 Inventories 603,900 452,600
Prepaid expenses 311,100 289,400 Total current assets $2,379,000
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Total current liabilities $610,000 $530,000 a. Determine for each
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Current Position Analysis The following data were taken from the balance sheet of Nilo Company at...
Current Position Analysis
The following data were taken from the balance sheet of Nilo
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Current Year
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Current assets:
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Marketable securities
485,800
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Accounts and notes receivable
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198,700
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Inventories
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475,800
Prepaid expenses
351,900
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Current liabilities:
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Accrued liabilities
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Total current liabilities
$690,000
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a. Determine for each year (1) the...
Current Position Analysis The following data were taken from the balance sheet of Nilo Company at...
Current Position Analysis
The following data were taken from the balance sheet of Nilo
Company at the end of two recent fiscal years:
Current Year
Previous Year
Current assets:
Cash
$334,400
$249,600
Marketable securities
387,200
280,800
Accounts and notes receivable
(net)
158,400
93,600
Inventories
798,600
585,600
Prepaid expenses
411,400
374,400
Total current assets
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Current liabilities:
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$319,000
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Accrued liabilities
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The following data were taken from the balance sheet of Nilo Company at the end of...
The following data were taken from the balance sheet of Nilo
Company at the end of two recent fiscal years:
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Previous Year
Current assets:
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Marketable securities
491,000
364,500
Accounts and notes receivable
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200,900
121,500
Inventories
982,100
658,800
Prepaid expenses
505,900
421,200
Total current assets
$2,604,000
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Current liabilities:
Accounts and notes payable
(short-term)
$359,600
$378,000
Accrued liabilities
260,400
162,000
Total current liabilities
$620,000
$540,000
a. Determine for each year (1) the working
capital, (2)...
The following data were taken from the balance sheet of Nilo Company at the end of...
The following data were taken from the balance sheet of Nilo
Company at the end of two recent fiscal years:
Current Year
Previous Year
Current assets:
Cash
$340,500
$268,800
Marketable securities
394,200
302,400
Accounts and notes receivable
(net)
161,300
100,800
Inventories
1,056,000
683,200
Prepaid expenses
544,000
436,800
Total current assets
$2,496,000
$1,792,000
Current liabilities:
Accounts and notes payable
(short-term)
$371,200
$392,000
Accrued liabilities
268,800
168,000
Total current liabilities
$640,000
$560,000
a. Determine for each year (1) the working
capital, (2)...
The following data were taken from the balance sheet of Nilo Company at the end of...
The following data were taken from the balance sheet of Nilo
Company at the end of two recent fiscal years:
Current Year
Previous Year
Current assets:
Cash
$492,500
$403,200
Marketable securities
570,200
453,600
Accounts and notes receivable
(net)
233,300
151,200
Inventories
617,800
422,700
Prepaid expenses
318,200
270,300
Total current assets
$2,232,000
$1,701,000
Current liabilities:
Accounts and notes payable
(short-term)
$417,600
$441,000
Accrued liabilities
302,400
189,000
Total current liabilities
$720,000
$630,000
a. Determine for each year (1) the working
capital, (2)...
The following data were taken from the balance sheet of Nilo Company at the end of...
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Current Year
Previous Year
Current assets:
Cash
$297,200
$224,000
Marketable securities
344,100
252,000
Accounts and notes receivable
(net)
140,700
84,000
Inventories
880,400
658,800
Prepaid expenses
453,600
421,200
Total current assets
$2,116,000
$1,640,000
Current liabilities:
Accounts and notes payable
(short-term)
$266,800
$280,000
Accrued liabilities
193,200
120,000
Total current liabilities
$460,000
$400,000
a. Determine for each year (1) the working
capital, (2)...
The following data were taken from the balance sheet of Nilo Company at the end of...
The following data were taken from the balance sheet of Nilo
Company at the end of two recent fiscal years:
Current Year
Previous Year
Current assets:
Cash
$458,700
$347,200
Marketable securities
531,100
390,600
Accounts and notes receivable
(net)
217,200
130,200
Inventories
1,546,400
1,134,600
Prepaid expenses
796,600
725,400
Total current assets
$3,550,000
$2,728,000
Current liabilities:
Accounts and notes payable
(short-term)
$411,800
$434,000
Accrued liabilities
298,200
186,000
Total current liabilities
$710,000
$620,000
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