Compute ratio, Financial Accounting

Assignment Help:

The comparative financial statement of new World Piano Company for 2003,2002, and 2001 included the following selected data:

2003 2002 2003
In Millions
Cash $67 $66 $62

Short Term Investments $93 $101 $69
Recivables, net of allowance for doubtful
accounts of $7, $6, $4 respectively $206 $154 $197
Inventories $408 $383 $341
prepaid expenses $32 $31 $25
________________________________
total current assets $806 $735 $694
total current liabilities $440 $416 $388

Income Statement:
Net Sales $2,071 $2,005 $1,944
**Did number 1**
1. Compute these ratios for 2003 and 2002 ( Must Show Work )
A - Current Ratio (1.83 1.76)
B - Acid-test Ratio (0.83 0.77)
C - Days' sales in receivables (36 28)

2. Write a memo explaining to top management which ratio values showed improvement from 2002 to 2003 and which ratio values deteriorated. State whether the overall trend is favorable or unfavorable for the company and give the reason for your evaluation.

 


Related Discussions:- Compute ratio

Accounts of trustees-trustees bank account, Accounts of trustees The t...

Accounts of trustees The trustee must keep proper books of account, which may be inspected by the creditors at any time. The cash book must be audited by the committee of insp

Discount rate to the estimated npv of the investment, Q. Discount rate to t...

Q. Discount rate to the estimated NPV of the investment? There is no necessity to round the solution up to the nearest whole percentage. NPV approximate may be made using the e

Show the expatriation tax, Q. Show the Expatriation Tax? Expatriation T...

Q. Show the Expatriation Tax? Expatriation Tax - Individuals who loose or terminate their residency within 10 year period immediately preceding the close of a tax year, if term

Wider-range investments-accounts under trustee, Wider-range Investments ...

Wider-range Investments (Requiring advice in writing from a properly qualified person) Quoted shares of a company with a paid-up capital of not less than Shs10m and has

Primary restriction of making demand, Q. Primary restriction of making dema...

Q. Primary restriction of making demand? The primary restriction of making demand forecasts lies in the fact that they are forecasts and hence their reliability is unknown. Mos

Protected transactions, Protected transactions These fall into three ca...

Protected transactions These fall into three categories: (A) Under Section 50: Payments by the bankrupt to creditors; Payments or deliveries to the bankrupt; C

Draw budget constraint for cooking oil and flour, 1. You can buy any quanti...

1. You can buy any quantity of cooking oil at $5 per litre and any quantity of flour at $2 per kilo. You have allocated $20 to spend on cooking oil and flour.    (a) If you choo

Disclaimer-liquidation of companies, Disclaimer The liquidator may disc...

Disclaimer The liquidator may disclaim onerous property consisting of: 1.    Land burdened with onerous covenants; 2.    Stocks and shares; 3.    Unprofitable contracts, or 4.

Process to increase the financial health of company, Process to increase th...

Process to increase the financial health of company Financial affairs of a limited company enter public domain. With exception of small companies, there is also a requirement f

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd