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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962 Exercise 28
Liquidity Ratios
Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years.
Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years.
Refer to the information for Kepler Company above.
Required:
Note : Round all answers to two decimal places.
1. Compute the following ratios for each year: (a) current ratio, (b) quick ratio, (c) receivables turnover (in days), and (d) inventory turnover (in days).
2. CONCEPTUAL CONNECTION Has the liquidity of Kepler improved over the past year? Explain why industrial liquidity performance would be useful information in assessing Kepler's liquidity performance.
Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years.
Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years.
Refer to the information for Kepler Company above.
Required:
Note : Round all answers to two decimal places.
1. Compute the following ratios for each year: (a) current ratio, (b) quick ratio, (c) receivables turnover (in days), and (d) inventory turnover (in days).
2. CONCEPTUAL CONNECTION Has the liquidity of Kepler improved over the past year? Explain why industrial liquidity performance would be useful information in assessing Kepler's liquidity performance.
Explanation
Verified
Verified
1.
a. for this year,
Current ratio =
...
Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
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