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 $498,200 $384,000 Marketable securities 576,800 432,000 Accounts and notes receivable (net) 236,000 144,000 Inventories 1,047,400 805,200 Prepaid expenses 539,600 514,800 Total current assets $2,898,000 $2,280,000 Current liabilities: Accounts and notes payable (short-term) $400,200 $420,000 Accrued liabilities 289,800 180,000 Total current liabilities $690,000 $600,000 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 $fill in the blank 1 $fill in the blank 2 2. Current ratio fill in the blank 3 fill in the blank 4 3. Quick ratio fill in the blank 5 fill in the blank 6 b. The liquidity of Nilo has IMPROVED OR DECLINED from the preceding year to the current year. The working capital, current ratio, and quick ratio have all INCREASED OR DECREASED . Most of these changes are the result of an INCREASED OR DECREASED in current assets relative to current liabilities.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 50E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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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	$498,200			$384,000
Marketable securities	576,800			432,000
Accounts and notes receivable (net)	236,000			144,000
Inventories	1,047,400			805,200
Prepaid expenses	539,600			514,800
	Total current assets	$2,898,000			$2,280,000
Current liabilities:
Accounts and notes payable
	(short-term)	$400,200			$420,000
Accrued liabilities	289,800			180,000
	Total current liabilities	$690,000			$600,000

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	$fill in the blank 1	$fill in the blank 2
2. Current ratio	fill in the blank 3	fill in the blank 4
3. Quick ratio	fill in the blank 5	fill in the blank 6

b. The liquidity of Nilo has IMPROVED OR DECLINED from the preceding year to the current year. The working capital, current ratio, and quick ratio have all INCREASED OR DECREASED . Most of these changes are the result of an INCREASED OR DECREASED in current assets relative to current liabilities.

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