Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
14th Edition
ISBN: 9781337541398
Author: Carl Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 14, Problem 7E
A. (1)
To determine
Financial Ratios: Financial ratios are the metrics used to evaluate the capabilities, profitability, and overall performance of a company.
To compute:
Given info: Items of current asset and current liabilities
A. (2)
To determine
To compute: Acid-test ratio for current year and previous year.
Given info: Items of current asset and current liabilities
B.
To determine
To provide: Conclusion towards company’s ratios
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Quick Ratio
Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years:
Current Year
Previous Year
Current assets:
Cash
$487,000
$763,000
Accounts receivable
431,000
359,000
Inventory
266,000
303,000
Total current assets
$1,184,000
$1,425,000
Current liabilities:
Current portion of long-term debt
$86,000
$77,000
Accounts payable
173,000
153,000
Accrued and other current liabilities
281,000
280,000
Total current liabilities
$540,000
$510,000
a. Determine the quick ratio for December 31 of both years. If required, round your answers to one decimal place.
Quick Ratio
Previous year:
Current year:
b. How did the quick ratio change between the two balance sheet dates?
Working Capital and Short Term Liquidity Ratios
Bell Company has a current ratio of 2.85 on December 31. On that date the company's current assets are as follows:
Cash
Short-term investments
Accounts receivable (net)
Inventory
Prepaid expenses
Current assets
$31,400
52,000
169,000
220,000
11,600
$484,000
Bell Company's current liabilities at the beginning of the year were $135,000 and during the year its operating activities provided a cash flow of $50,000.
a. What are the firm's current liabilities on December 31?
Round answer to the nearest whole number.
0
b. What is the firm's working capital on December 31?
Round answer to the nearest whole number.
0
c. What is the quick ratio on December 31?
Round answer to 2 decimal places.
0
d. What is the Bell's operating-cash-flow-to-current-liabilities ratio?
Round answer to 2 decimal places.
Quick Ratio
Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years:
Current Year
Previous Year
Current assets:
Cash
$ 486,000
$ 500,000
Accounts receivable
210,000
200,000
Inventory
375,000
350,000
Total current assets
$1,071,000
$1,050,000
Current liabilities:
Current portion of long-term debt
$ 145,000
$ 110,000
Accounts payable
175,000
150,000
Accrued and other current liabilities
260,000
240,000
Total current liabilities
$ 580,000
$ 500,000
a. Determine the quick ratio for December 31 of both years. If required, round your answers to one decimal place.
Quick Ratio
Previous year:
fill in the blank 1
Current year:
fill in the blank 2
b. How did the quick ratio change between the two balance sheet dates?
Which statement below describes the change between the two balance sheet dates?
Chapter 14 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
Ch. 14 - Prob. 1DQCh. 14 - What is the advantage of using comparative...Ch. 14 - Prob. 3DQCh. 14 - Prob. 4DQCh. 14 - Prob. 5DQCh. 14 - What do the following data, taken from a...Ch. 14 - Prob. 7DQCh. 14 - Prob. 8DQCh. 14 - Prob. 9DQCh. 14 - Prob. 10DQ
Ch. 14 - Prob. 1BECh. 14 - Prob. 2BECh. 14 - Prob. 3BECh. 14 - Prob. 4BECh. 14 - Prob. 5BECh. 14 - Prob. 6BECh. 14 - Prob. 7BECh. 14 - Prob. 8BECh. 14 - Prob. 9BECh. 14 - Prob. 10BECh. 14 - Prob. 11BECh. 14 - Prob. 1ECh. 14 - Prob. 2ECh. 14 - Prob. 3ECh. 14 - Prob. 4ECh. 14 - Prob. 5ECh. 14 - Prob. 6ECh. 14 - Prob. 7ECh. 14 - Current position analysis The bond indenture for...Ch. 14 - Prob. 9ECh. 14 - Accounts receivable analysis Xavier Stores Company...Ch. 14 - Prob. 11ECh. 14 - Prob. 12ECh. 14 - Ratio of liabilities to stockholders equity and...Ch. 14 - Prob. 14ECh. 14 - Prob. 15ECh. 14 - Prob. 16ECh. 14 - Prob. 17ECh. 14 - Prob. 18ECh. 14 - Prob. 19ECh. 14 - Prob. 20ECh. 14 - Prob. 21ECh. 14 - Prob. 22ECh. 14 - Prob. 23ECh. 14 - Prob. 24ECh. 14 - Prob. 25ECh. 14 - Comprehensive income Anson Industries, Inc.,...Ch. 14 - Prob. 1PACh. 14 - Prob. 2PACh. 14 - Prob. 3PACh. 14 - Measures of liquidity, solvency, and profitability...Ch. 14 - Prob. 5PACh. 14 - Prob. 1PBCh. 14 - Prob. 2PBCh. 14 - Prob. 3PBCh. 14 - Prob. 4PBCh. 14 - Prob. 5PBCh. 14 - Prob. 1FSACh. 14 - Prob. 1ADMCh. 14 - Prob. 2ADMCh. 14 - Prob. 3ADMCh. 14 - Prob. 1TIFCh. 14 - Prob. 3TIF
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