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enow.com/ilm/takeAssignment/takeAssignmentMain.do?invoker- assignments&takeAssignmentSessionLocator; assignment-take&inprogress-false; d Problems eBook Show Me How Calculator Print Item Current Position Analysis The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years: Current Year Previous Year Current assets Cash Marketable securities Accounts and notes receivable (net) Inventories Prepaid expenses $430,900 499,000 204,100 641,500 330,500 $2.106,000 $338,400 380,700 126,900 487,400 311,600 $1,645,000 Total current assets Current liabilities: Accounts and notes payable $313,200 226,800 $540,000 $329,000 141,000 $470,000 (short-term) Accrued liabilities Total current liabilities atio, and 13) the auick ratio. Round ratios to one decimal place. a. Determine for each year (1) the working capital, (2) the Current Year Previous Year Pre Check My Work 2 more Check My Work uses remaining 1142 PM

Explanation / Answer

a.

b. The liquidity ratio of Nilo of current year is better than previous year. The ratio is better.

Formula Current Year Previous Year 1. Working Capital = Current Asset-Current Liablities 2106000-540000=1566,000 1645000-470000=1175,000 2. Current ratio = Current Asset/Current Liablities 2106000/540000=3.9 1645000/470000=3.5 3. Quick ratio = Total Current Asset-Inventroy-Prepaid Expense/Current Liabalities 2106000-330500-641500/540000=2.1 1645000-311600-487400=1.8

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