Storm Weather Industries manufactures weather equipment. Selected financial data
ID: 2618609 • Letter: S
Question
Storm Weather Industries manufactures weather equipment. Selected financial data for Storm Weather is presented below.
As of
Dec. 31, 2012
Dec. 31, 2011
Current Assets
Cash and cash equivalents
$ 376,843
$ 205,088
Marketable Securities
166,106
187,064
Accounts Receivable (net)
258,387
289,100
Inventories
424,493
391,135
Prepaid Expenses
55,369
25,509
Other current assets
83,053
85,029
Total Current Assets
1,364,251
1,182,925
Plant Property and Equipment
1,384,217
625,421
Long-Term Investment
568,003
425,000
Total Assets
$3,316,471
$2,233,346
Current Liabilities
Short-term borrowings
$ 206,376
$ 70,419
Current portion of long-term debt
155,000
168,000
Accounts payable
254,111
286,257
Accrued liabilities
273,658
166,983
Income taxes payable
97,735
178,911
Total Current Liabilities
986,880
870,570
Long-Term Debt
500,000
300,000
Deferred Income Taxes
215,017
262,404
Total Liabilities
1,701,897
$1,432,974
Common Stock
$ 425,250
$ 125,000
Additional Paid-in Capital
356,450
279,951
Retained Earnings
832,874
395,421
Total Stockholders' Equity
1,614,574
800,372
Total Liabilities and Stockholders' Equity
$3,316,471
$2,233,346
Selected Income Statement Data - for the year ending December 31, 2012:
Net Sales
$4,685,340
Cost of Goods Sold
(2,942,353
)
Selling Expenses
(884,685
)
Operating Income
858,302
Interest Expense
(45,240
)
Earnings before Income Taxes
813,062
Income Tax Expense
(325,609
)
Net Income
$ 487,453
Selected Statement of Cash Flow Data - for the year ending December 31, 2012:
Cash Flows from Operations
$1,256,084
Capital Expenditures
$745,862
Storm Weather's current ratio changed by what percentage from 2011 to 2012?
+ 1.74%
- 8.5%
+ 3.8%
+ 13.8%
As of
Explanation / Answer
Current ratio = Current Assets/Current Liabilities
It indicates liquidity position of the company.
In 2011,
Current Ratio = 1,182,925/870,570 = 1.3588
In 2012,
Current Ratio = 1,364,251/986,880 = 1.3824
% Change in Current Ratio = (1.3824 - .3588)/1.3588 = 1.74% ---> Option A. Answer
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