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Data for Tropical Enterprises? follows: 2019 2018 2017 Total Current Assets $400,000 $300,000 $250,000 Total Current...

Data for Tropical Enterprises? follows:

2019

2018

2017

Total Current Assets

$400,000

$300,000

$250,000

Total Current Liabilities

190,000

150,000

125,000

Compute the dollar amount of change and the percentage of change in Tropical ?Enterprises's working capital each year during 2019 and 2018. What do the calculated changes? indicate?

Begin by selecting the formula to compute the working? capital, the dollar amount of change and the percentage of change in Tropical ?Enterprises' working capital.

Working capital =__________________________________

Dollar amount of change = __________________________

Percentage of change = _________________________________

?First, calculate the amount and percentage of change in working capital in 2018. ?(Round the percentage to one decimal? place, X.X%.)

The amount of change in working capital is ________

The percentage of change in working capital is _________%

. ?Next, calculate the amount and percentage of change in working capital in 2019. ?(Round the percentage to one decimal? place, X.X%.)

The amount of change in working capital is__________ .

The percentage of change in working capital is_________ %.

What do the calculated changes? indicate?

Tropical ?Enterprises' working capital has ? -deteriorated or improved -year over year from 2017 to 2019.

Expert Solution

Working Capital is calculated by deducting the current liabilities from the current assets.

The following table shows the required calculations.

Working Capital:

2017 : $250,000 - $125,000 = $125,000

2018: $300,000 - $150,000 = $150,000

2019: $400,000 - $190,000 = $210,000

Amount of working capital change in 2018 = Working capital amount in 2018 - Working capital amount in 2017

= $150,000 - $125,000

= $25,000

Percentage of change in working capital = Amount of change in working capital in 2018 ÷ Working Capital in 2017

= $25,000 ÷ $125,000

= 20%

Amount of working capital change in 2019 = Working capital amount in 2019 - Working capital amount in 2018

= $210,000 - $150,000

= $60,000

Percentage of change in working capital in 2019 = Amount of change in working capital in 2019 ÷ Working Capital in 2018

= $60,000 ÷ $150,000

= 40%

The calculated changes indicate that the liquidity of the company is increasing.

The working capital of Tropical enterprises' is improved year over year from 2017 to 2019.

ekkarill92 answered 1 year ago

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