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 $329,800 $259,200 Marketable securities 381,900 291,600 Accounts and notes receivable (net) 156,300 97,200 Inventories 900,200 560,000 Prepaid expenses 463,800 358,000 Total current assets $2,232,000 $1,566,000 Current liabilities: Accounts and notes payable (short-term) $359,600 $378,000 Accrued liabilities 260,400 162,000 Total current liabilities $620,000 $540,000 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 from the preceding year to the current year. The working capital, current ratio, and quick ratio have all . Most of these changes are the result of an _ 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	$329,800			$259,200
Marketable securities	381,900			291,600
Accounts and notes receivable (net)	156,300			97,200
Inventories	900,200			560,000
Prepaid expenses	463,800			358,000
	Total current assets	$2,232,000			$1,566,000
Current liabilities:
Accounts and notes payable
	(short-term)	$359,600			$378,000
Accrued liabilities	260,400			162,000
	Total current liabilities	$620,000			$540,000

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 ______ from the preceding year to the current year. The working capital, current ratio, and quick ratio have all ______. Most of these changes are the result of an _____ in current assets relative to current liabilities.

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