Solution-Computing working capital and the current ratio

Computing working capital and the current ratio

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Reference no: EM133037132

Question - AN Comparative financial statement data for Loeb Corporation and Bowsh Corporation, two competitors, appear below. All balance sheet data are as of December 31, 2022.

	Loeb Corporation 2022	Bowsh Corporation 2022
Net sales	$1,800,000	$620,000
Cost of goods sold	1,175,000	340,000
Operating expenses	283,000	98,000
Interest expense	9,000	3,800
Income tax expense	85,000	36,000
Current assets	407,200	190,336
Plant assets (net)	532,000	139,728
Current liabilities	66,325	33,716
Long-term liabilities	108,500	40,684

Required -

a. Comment on the relative liquidity of the companies by computing working capital and the current ratio for each company for 2022.

b. Comment on the relative solvency of the companies by computing the debt to assets ratio for each company for 2022.

Reference no: EM133037132

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Computing working capital and the current ratio

Reference no: EM133037132

Reference no: EM133037132

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