Ratio analysis It is the financial analysis tool for measuring the profitability, liquidity, capability and overall performance of a company. Following are the two measures of liquidity: 1. Current ratio : Current ratio is used to determine the relationship between current assets and current liabilities. The ideal current ratio is 2:1. The following formula is used to calculate current ratio. 2. Working capital : Total current assets minus total current liabilities are the working capital of a company. The working capital and current ratio for 2016 and 2015.

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Answer 1

Question

Chapter 4, Problem 4.6BPE

(a)

To determine

Ratio analysis

It is the financial analysis tool for measuring the profitability, liquidity, capability and overall performance of a company.

Following are the two measures of liquidity:

1. Current ratio: Current ratio is used to determine the relationship between current assets and current liabilities. The ideal current ratio is 2:1. The following formula is used to calculate current ratio.

2. Working capital: Total current assets minus total current liabilities are the working capital of a company.

The working capital and current ratio for 2016 and 2015.

(b)

To determine

To Indicate: The change in current ratio form 2015 to 2016.

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Answer 2

Question

Chapter 4, Problem 4.6BPE

(a)

To determine

Ratio analysis

It is the financial analysis tool for measuring the profitability, liquidity, capability and overall performance of a company.

Following are the two measures of liquidity:

1. Current ratio: Current ratio is used to determine the relationship between current assets and current liabilities. The ideal current ratio is 2:1. The following formula is used to calculate current ratio.

2. Working capital: Total current assets minus total current liabilities are the working capital of a company.

The working capital and current ratio for 2016 and 2015.

(b)

To determine

To Indicate: The change in current ratio form 2015 to 2016.

Expert Solution & Answer

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Answer 3

Question

Chapter 4, Problem 4.6BPE

(a)

To determine

Ratio analysis

It is the financial analysis tool for measuring the profitability, liquidity, capability and overall performance of a company.

Following are the two measures of liquidity:

1. Current ratio: Current ratio is used to determine the relationship between current assets and current liabilities. The ideal current ratio is 2:1. The following formula is used to calculate current ratio.

2. Working capital: Total current assets minus total current liabilities are the working capital of a company.

The working capital and current ratio for 2016 and 2015.

(b)

To determine

To Indicate: The change in current ratio form 2015 to 2016.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 4.6BPE

(a)

To determine

Ratio analysis

It is the financial analysis tool for measuring the profitability, liquidity, capability and overall performance of a company.

Following are the two measures of liquidity:

1. Current ratio: Current ratio is used to determine the relationship between current assets and current liabilities. The ideal current ratio is 2:1. The following formula is used to calculate current ratio.

2. Working capital: Total current assets minus total current liabilities are the working capital of a company.

The working capital and current ratio for 2016 and 2015.

(b)

To determine

To Indicate: The change in current ratio form 2015 to 2016.

Expert Solution & Answer

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Answer 5

Chapter 4, Problem 4.6BPE

(a)

To determine

Ratio analysis

It is the financial analysis tool for measuring the profitability, liquidity, capability and overall performance of a company.

Following are the two measures of liquidity:

1. Current ratio: Current ratio is used to determine the relationship between current assets and current liabilities. The ideal current ratio is 2:1. The following formula is used to calculate current ratio.

2. Working capital: Total current assets minus total current liabilities are the working capital of a company.

The working capital and current ratio for 2016 and 2015.

(b)

To determine

To Indicate: The change in current ratio form 2015 to 2016.

Answer 6

Chapter 4, Problem 4.6BPE

(a)

To determine

Ratio analysis

It is the financial analysis tool for measuring the profitability, liquidity, capability and overall performance of a company.

Following are the two measures of liquidity:

1. Current ratio: Current ratio is used to determine the relationship between current assets and current liabilities. The ideal current ratio is 2:1. The following formula is used to calculate current ratio.

2. Working capital: Total current assets minus total current liabilities are the working capital of a company.

The working capital and current ratio for 2016 and 2015.

Answer 7

Chapter 4, Problem 4.6BPE

(a)

To determine

Ratio analysis

It is the financial analysis tool for measuring the profitability, liquidity, capability and overall performance of a company.

Following are the two measures of liquidity:

1. Current ratio: Current ratio is used to determine the relationship between current assets and current liabilities. The ideal current ratio is 2:1. The following formula is used to calculate current ratio.

2. Working capital: Total current assets minus total current liabilities are the working capital of a company.

The working capital and current ratio for 2016 and 2015.

Answer 8

(b)

To determine

To Indicate: The change in current ratio form 2015 to 2016.

Answer 9

(b)

To determine

To Indicate: The change in current ratio form 2015 to 2016.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 4 - Why do some accountants prepare an end-of-period...Ch. 4 - Describe the nature of the assets that compose the...Ch. 4 - Prob. 3DQ Ch. 4 - Prob. 4DQ Ch. 4 - Why are closing entries required at the end of an...Ch. 4 - What is the difference between adjusting entries...Ch. 4 - What is the purpose of the post-closing trial...Ch. 4 - Prob. 8DQ Ch. 4 - What is the natural business year?Ch. 4 - Prob. 10DQ

Solution Summary: The author explains that the current ratio is used to determine the relationship between current assets and current liabilities. The working capital for 2016 is 881,250 and for 2015 is 660,000.

To Indicate: The change in current ratio form 2015 to 2016.

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Chapter 4 Solutions