What is the: 1. Working Capital? 2. Current Ratio? 3. Acid-test ratio? Comparati
ID: 2487642 • Letter: W
Question
What is the:
1. Working Capital?
2. Current Ratio?
3. Acid-test ratio?
Comparative financial statements for Weller Corpor ending December 31 appear below. The company did not issue any new common stock during the year. A total of 600,000 shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $1.00 last year and $0.65 this year. The market value of the company's common stock at the end of the year was $26. All of the company's sales are on account. ation, a merchandising company, for the fiscal year Weller Corporation Comparative Balance Sheet (dollars in thousands) This YearLast Year Assets Current assets: Cash Accounts receivable, net Inventory Prepaid expenses $ 1,110 1,330 9,500 8,100 13,200 12,000 700 630 Total current assets 24,440 22,130 Property and equipment: 9,600 9,600 Land Buildings and equipment, net 45,738 40,60 55,338 50,204 $79,778 $72,334 Total property and equipment Total assetsExplanation / Answer
1.
Working capital = Current assets - Current liabilities
This year
Last year
Current assets
$ 24,440
$ 22,130
Less: Current liabilities
$ 20,010
$ 19,070
Working capital
$ 4,430
$ 3,060
2.
Current ratio = Current assets/Current liabilities
This year
Last year
A. Current assets
$ 24,440
$ 22,130
B. Current liabilities
$ 20,010
$ 19,070
Current ratio (A/B)
1.22
1.16
3.
This year
Last year
Current assets
$ 24,440
$ 22,130
Less: Inventory
$ 13,200
$ 12,000
Less: Prepaid expenses
$ 630
$ 700
A. Quick assets
$ 10,610
$ 9,430
B. Current liabilities
$ 20,010
$ 19,070
Acid-test ratio (A/B)
0.53
0.49
This year
Last year
Current assets
$ 24,440
$ 22,130
Less: Current liabilities
$ 20,010
$ 19,070
Working capital
$ 4,430
$ 3,060
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.