Answered: JRL's financial statements contain the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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JRL's financial statements contain the following information: Cash $400,000 Marketable securities 115,000 Accounts receivable 800,000 Inventory 950,000 Accounts payable 575,000 Accrued expenses 180,000 Long-term debt 900,000 Cost of goods sold 1,000,000 Required: Assume the accounts payable balance is all trade payables and opening and closing balances are the same. Round your answers to two decimal places. 1. What is its current ratio? fill in the blank 1 2. What is its quick ratio? fill in the blank 2 3. What is its cash ratio? fill in the blank 3 4. What is the trade payable turnover ratio? fill in the blank 4 5. Discuss JRL's liquidity using these ratios. JRL’s current ratio depends on how liquid JRL's are. If the is slow moving, then the quick ratio may be a better indicator of liquidity. If accounts receivable may be difficult to collect, the is best indicator of liquidity.

Definition Definition Difference in value of a country's net exports and net imports for goods and services in a given period. A positive balance of trade is called a surplus and coincides with more net cash inflows into a country; a negative balance of trade deficit is a deficit and results in net cash outflows. A balance of trade surplus or deficit doesn't necessarily indicate a positive or negative situation for a country.

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