Short-term solvency, Financial Accounting

Assignment Help:

Example of Short-term Solvency

 

                        Current Ratio = Current Assets / Current Liabilities

                                               = 5.38

                        This has increased from 3.97 in the previous year to 5.38 in the current year, indicating that the working capital of the company has increased and hence strengthening its liquid position.

 

                        Quick Ratio = (Current Assets - Inventory) / Current Liabilities

                                            = 4.57

                        This has increased from 3.47 in the previous year to 4.57 in the current year, indicating that there was some reduction in its Inventory as a part of it was sold off.

 

 


Related Discussions:- Short-term solvency

Investment of funds to provide for legacies and interest, INVESTMENT OF FUN...

INVESTMENT OF FUNDS TO PROVIDE FOR LEGACIES AND INTEREST ON LEGACIES (a) Where a general legacy is given for life, the sum bequeathed shall, at or before the end of a year afte

Statement of cash flow, under gaap, are proceeds from capital lease obligat...

under gaap, are proceeds from capital lease obligation reported in the statement of cash flow and why

Answer for Assignment, Transaction Entry Information: May 1 Owener H.Hadi ...

Transaction Entry Information: May 1 Owener H.Hadi invested $40,000 in the business

The fair-value method of accounting for nci., In the current year, Company ...

In the current year, Company A is formed with $630,000 in capital from the sale of 21,000 shares of stock at $30 a share. Company A, which has no other operations, immediately acqu

The garraty company, The Garraty Company has two bond issues outstanding.Bo...

The Garraty Company has two bond issues outstanding.Both bonds pay $100 yearly interest plus $1,000 at maturity. Bond L has a maturity of 15 years, and Bond S a maturity of 1 year.

Vertical anaylsis, Income Statement 2013 2012 2011 Vertical Anaylsis Vertic...

Income Statement 2013 2012 2011 Vertical Anaylsis Vertical Anayl Horizontal Net revenue 5,075,390 4,763,180 4,158,507 year 1 year 2 Anaylsis Cost of goods 1,377,242 1,297,102 1,134

Uniform capitalization rules, Uniform Capitalization Rules- These are a se...

Uniform Capitalization Rules- These are a set of rules intended to be a single comprehensive set of rules to govern capitalization, or inclusion in INVENTORY of indirect and direc

P6-2b, #questioSavage Distribution markets CDs of the performing artist Lit...

#questioSavage Distribution markets CDs of the performing artist Little Sister. At the beginning of October, Savage had in beginning inventory 1,200 Sister’s CDs with a unit cost o

Calculate asset turnover, What is asset turnover - Asset turnover is a rat...

What is asset turnover - Asset turnover is a ratio which is considered as measures the effectiveness with which a business uses its assets in relation to the level of sales or inc

Financial statements, Describe the following questions:- Q.1 Explain how...

Describe the following questions:- Q.1 Explain how financial statements assist in the capital allocation process. How are financial statements limited? Which financial statement

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