Selected financial data for Link, Inc. follows: ($ in thousands) Assume a 365-da

ID: 2568975 • Letter: S

Question

Selected financial data for Link, Inc. follows: ($ in thousands)

Assume a 365-day year for your calculations. The days' sales in cash at the end of 2014 is:

A. 242.1

B. 24.3

C. 249.7

D, 28.8

E. 145.3

Which of the following statements best describes how the company's short-term liquidity changed from 2013 to 2014?

A. Link's short-run liquidity has deteriorated considerably.

B. Link's short-run liquidity has deteriorated very little.

C. Link's short-run liquidity has improved modestly.

D. Link's short-run liquidity has improved considerably.

E. Link's short-run liquidity has not changed.

A. 242.1

B. 24.3

C. 249.7

D, 28.8

E. 145.3

Which of the following statements best describes how the company's short-term liquidity changed from 2013 to 2014?

A. Link's short-run liquidity has deteriorated considerably.

B. Link's short-run liquidity has deteriorated very little.

C. Link's short-run liquidity has improved modestly.

D. Link's short-run liquidity has improved considerably.

E. Link's short-run liquidity has not changed.

2013 2014 ncome statement and related items Sales Cost of goods sold Net income Cash flow from operations Balance sheet items Cash Marketable securities Accounts receivable Inventory $193,730$320,115 159,973 122,642 -40,971 261,801 -299,460 -15,810 247,403 230,644 15,520 3,886 497,453 19,204 39,627 $58,831 179,609 32,695 26,129 48,220 286,653 19,066 89,820 $108,886 l otal current assets Accounts payable Accrues liabilities Total current liabilities

Explanation / Answer

Accounts receivables turnover ratio = average cash/ sales per day

320115/20814.5

243.4428

sales per day

320115/365

877.0274

average cash = opening+ closing / 2

(247403+179609)/2

213506

Answer is A

Link's short-run liquidity has deteriorated considerably.