FIN624_fcordero_week2

FIN624_fcordero_week2 - -670-470-373-741-914 invesiting...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
3. A. 2000 2001 2002 2003 2004 Current Ratio 1.50 1.46 1.75 2.00 2.27 Quick Ratio 1.07 0.95 1.16 1.44 1.60 Net Working Capital 175.00 227.00 447.00 450.00 475.00 Working Capital Requirement 52.00 220.00 3.00 19.00 Because the Quick ratios have been over 1.0 except for 1 year but then they have been escalating it sh For every dollar in current liabilities, there is more then $1 in current assets which is good news. A high working capital ratio isn't always a good thing, it could indicate that they have too much inventory Working capital management is very important to ensure that the company has enough funds to carry o Inflows of Cash Net Earnings 141 282 487 213 54 Adjustment Depreiaton/amorization 35 50 65 70 75 Change in assets/Liabilties Accounts Receivables -300 -400 -600 -550 -500 Merchandise Inventory -150 -250 -350 -250 -250 Other Assets -625 -675 -710 -640 -565 Accounts Payable 125 175 250 225 200 Accrued Expenses 10 63 65 49 36 Income Taxes 94 285 420 142 36 Net Cash Used operating activities
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: -670-470-373-741-914 invesiting activities 165 162 178 136 99 financing activities 650 598 500 240 190 Net +/- in cash and equivalent 145 290 305-365-625 Chapter 3 Problem 3 A. $4,819.28 B. $4,878.05 C. $4,816.00 $1.04 $1.03 $1.04 Current Assets ÷ Current Liabilities Cash + Accounts Receivable ÷ Current Liabilities Current Assets − Current Liabilities Working Capital Required = (Increase in accounts receivable + Increase in inventory + Cash inflows i.e. c – (Increase in accounts payable + Cash outflows i.e. prepaid expenses, payment to suppliers, other curr hows that there is not a dependency on inventory and other current assets to liquidate short-term debt. y or they are not investing their excess cash. on with its day-to-day operations smoothly. The numbers show they have enough from year to year. $4,876.57 $1.03 cash in bank, bank loan, other current assets) rent liabilities)...
View Full Document

Page1 / 3

FIN624_fcordero_week2 - -670-470-373-741-914 invesiting...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online