FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question 2
Shown below are liquidity ratios for several companies.
Company #1 Company #2
1.5:1
1.6:1
29 days
57 days
71 days
20 days
Company #3
1.3:1
39 days
50 days
Company #4
2.9:1
Industry
Average
1.2:1
Current ratio
Average collection period
52 days
65 days
Days in inventory
For each of the following questions, choose the appropriate company by referring to the ratios shown above.
45 days
60 days
▼(a)
Which company sold common shares recently and has not yet invested all of the cash raised from the share issue?
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Transcribed Image Text:Question 2 Shown below are liquidity ratios for several companies. Company #1 Company #2 1.5:1 1.6:1 29 days 57 days 71 days 20 days Company #3 1.3:1 39 days 50 days Company #4 2.9:1 Industry Average 1.2:1 Current ratio Average collection period 52 days 65 days Days in inventory For each of the following questions, choose the appropriate company by referring to the ratios shown above. 45 days 60 days ▼(a) Which company sold common shares recently and has not yet invested all of the cash raised from the share issue?
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