1.
Introduction:An indicator that specifies the ability of a company to repay its current obligations is termed the
To calculate: Following ratios for K Company and GM Inc.
- Current ratio
- Quick ratio
2.
Introduction:Short term obligations that are paid within a year or operating cycle are termed as current liabilities or in other words it can be referred to as a debt that needs to be repaid within a year.
To calculate: Ratio of cash flow from operations to current liabilities ofK Company and GM Inc. for 2014.
3.
Introduction:Liquidity is a situation in which, the asset of a company can quickly and easilybe converted into cash, i.e., within a short period. Assets that are quickly turned into cash are said to be liquid assets.
To comment: On the liquidity of K Company and GM Inc.
4.
Introduction: Liquidity is a situation in which, the asset of a company can quickly and easilybe converted into cashi.e. within a short period. Assets that are quickly turned into cash are said to be liquid assets.
To specify: Other ratios that help in determining the liquidity of a company.
Want to see the full answer?
Check out a sample textbook solution
Chapter 13 Solutions
Financial Accounting: The Impact on Decision Makers
- Measures of liquidity, solvency, and profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was 82.60 on December 31, 20Y2. Instructions Determine the following measures for 20Y2, rounding to one decimal place, including percentages, except for per-share amounts: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days sales in receivables 6. Inventory turnover 7. Number of days sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders equity 10. Times interest earned 11. Asset turnover 12. Return on total assets 13. Return on stockholders equity 14. Return on common stockholders equity 15. Earnings per share on common stock 16. Price-earnings ratio 17. Dividends per share of common stock 18. Dividend yieldarrow_forwardMeasures of liquidity, solvency, and profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was 82.60 on December 31, 20Y2. Instructions Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts): 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days sales in receivables 6. Inventory turnover 7. Number of days sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders equity 10. Times interest earned 11. Asset turnover 12. Return on total assets 13. Return on stockholders equity 14. Return on common stockholders equity 15. Earnings per share on common stock 16. Price-earnings ratio 17. Dividends per share of common stock 18. Dividend yieldarrow_forward
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub