Question
Asked Dec 5, 2019
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mоmmg uprаruma camештаuо
The following data (in thousands) were taken from recent financial statements of Star-
bucks Corporation:
Year 2
Year 1
$4,352,700
$4,168,700
Current assets
Current liabilities
3,653,500
3,038,700
a. Compute the working capital and the current ratio for Year 2 and Year 1. Round to
two decimal places.
b.
What conclusions concerning the company's ability to meet its financial ob-
ligations can you draw from part (a)?
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mоmmg uprаruma camештаuо The following data (in thousands) were taken from recent financial statements of Star- bucks Corporation: Year 2 Year 1 $4,352,700 $4,168,700 Current assets Current liabilities 3,653,500 3,038,700 a. Compute the working capital and the current ratio for Year 2 and Year 1. Round to two decimal places. b. What conclusions concerning the company's ability to meet its financial ob- ligations can you draw from part (a)?

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Expert Answer

Step 1

a. Calculate the working capital for year 2 and year 1

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Year 1 ($) Year 2 (S) Particulars Current assets Less: Current liabilities Working capital $4,352,700 $4,168,700 -$3.653,500 -$3.038,700 $699,200 $1,130,000

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Step 2

a. Calculate the current ratio for ye...

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Current assets Current ratio for year 2 = Current liabilties S4,352,700 S3, 653, 500 =1.19 Current assets Current ratio for year 1 = Current liabilties $4,168,700 S3, 038, 700 =1.37

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