Current Position Analysis The following data were taken from the balance sheet o

Question

Current Position Analysis The following data were taken from the balance sheet of Bock Suppliers Company Previous Yea Cash Temporary investments Accounts and notes receivable (net) Inventories Prepaid expenses Current Year $418,800 484,900 198,300 689,000 355,000 $320,000 360,000 120,000 488,000 312,000 $1,600,000 Total current assets $2,146,000 Accounts and notes payable (short-term) $336,400 243,600 $580,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place $350,000 150,000 $500,000 Accrued liabilities Total current liabilities Current Year Previous Year 1. Working capital 2. Current ratio 3. Quick ratio

Explanation / Answer

Particulars Current Year Previous Year Current Assets (A)          2,146,000.0          1,600,000.0 Current Liabilities (B)              580,000.0              500,000.0 Net Working Capital (A-B)          1,566,000.0          1,100,000.0 Particulars Current Year Previous Year Current Assets (A)          2,146,000.0          1,600,000.0 Current Liabilities (B)              580,000.0              500,000.0 Current Ratio (A/B)                           3.7                           3.2 Particulars Current Year Previous Year Current Assets          2,146,000.0          1,600,000.0 Less: Inventory              689,000.0              488,000.0 Less: Prepaid Expenses              355,000.0              312,000.0 Liquid Assets (A)          1,102,000.0              800,000.0 Current Liabilities (B)              580,000.0              500,000.0 Quick Ratio (A/B)                           1.9                           1.6

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