Consider the following information taken from GER's financial statements: September 30 (in thousands) 2020 2019 Current assets: Cash and cash equivalents $1,274 $6,450 Receivables 30,071 16,548 Inventories 31,796 14,072 Other current assets 4,818 2,620 Total current assets $67,959 $39,690 Current liabilities: Current portion of long-term debt $97 $3,530 Accounts payable 23,124 11,228 Accrued compensation costs 5,606 1,929 Accrued expenses 9,108 5,054 Other current liabilities 874 777 Total current liabilities $38,809 $22,518 Also, GER's operating cash flows were $11,255 and $13,736 in 2020 and 2019, respectively. Round your answers to two decimal places. 2. Calculate the quick ratios for 2020 and 2019. Quick Ratio 2020 ?? 2019 ?? 3. Calculate the cash ratios for 2020 and 2019. Cash Ratio 2020 ?? 2019 ?? 5. Conceptual Connection: What are some reasons why GER's liquidity may be considered to be improving and some reasons why it may be worsening? GER’s liquidity appears to hold constant when one looks only at the _ ratio . However, because the _____ may not be easily converted to cash, the liquidity of GER may be worsening.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 103.3C

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Consider the following information taken from GER's financial statements:

	September 30 ^{(in thousands)}
	2020		2019
Current assets:
Cash and cash equivalents	$1,274	$6,450
Receivables	30,071	16,548
Inventories	31,796	14,072
Other current assets	4,818	2,620
Total current assets	$67,959	$39,690
Current liabilities:
Current portion of long-term debt	$97	$3,530
Accounts payable	23,124	11,228
Accrued compensation costs	5,606	1,929
Accrued expenses	9,108	5,054
Other current liabilities	874	777
Total current liabilities	$38,809	$22,518

Also, GER's operating cash flows were $11,255 and $13,736 in 2020 and 2019, respectively.

Round your answers to two decimal places.

2. Calculate the quick ratios for 2020 and 2019.

	Quick Ratio
2020	??
2019	??

3. Calculate the cash ratios for 2020 and 2019.

	Cash Ratio
2020	??
2019	??

5. Conceptual Connection: What are some reasons why GER's liquidity may be considered to be improving and some reasons why it may be worsening?

GER’s liquidity appears to hold constant when one looks only at the _______ ratio . However, because the ___________ may not be easily converted to cash, the liquidity of GER may be worsening.

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