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

State the users of accounting information, State the users of accounting in...

State the users of accounting information Environment has brought new challenges for managers and other users of accounting information. Their requirements have changed and bot

Calculate the new interest rate and excel function pv, Continuing growth of...

Continuing growth of the company has required that we issue the company's corporate debt soon. As you know, in 6 months we plan to issue $10 million worth of 20-year corporate bond

Revaluations, Revaluations Partners rarely revalue their assets and any r...

Revaluations Partners rarely revalue their assets and any revaluations may be carried out when a new partner is being admitted or an old partner is retiring.   To facilitate th

Total prime cost, Interstate Manufacturing produces brass fasteners and in...

Interstate Manufacturing produces brass fasteners and incurred the following costs for the year just ended: Materials and supplies used Brass

Calculate shares no., Q. Bento, Inc. had 500,000 shares of common stock out...

Q. Bento, Inc. had 500,000 shares of common stock outstanding before a stock split occurred, and 1,500,000 shares outstanding after the stock split. The stock split was a. 2-for-5.

Equity shareholders, Equity shareholders, potential and present, seem prima...

Equity shareholders, potential and present, seem primarily to the company's record of earnings. They are thus interested in relationships as earnings per share or EPS and dividends

What is the effect on g''s capital, Partners F and G receive an interest al...

Partners F and G receive an interest allowance of $10,000 and $15,000, respectively, and divide the remaining profits and losses in a 3:1 ratio. If the company sustained a net loss

Question, A. Material Sampling -Analyzing Direct Material Costs You are r...

A. Material Sampling -Analyzing Direct Material Costs You are reviewing a cost proposal, which includes an $800,200 direct material estimate. After Initial examination of the pr

Prepare a journal entry to record, On January 1, a company issued and sold ...

On January 1, a company issued and sold a $400,000, 7%, 10-year bong payable, and recieved proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses

Reduces retained earnings by the fair market value, Q. If a stockholder rec...

Q. If a stockholder receives a dividend that reduces retained earnings by the fair market value of the stock, the stockholder has received a a. large stock dividend. b. cash divide

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