Agency Rent A Car Inc rents cars to customers whose vehicles are
Agency Rent-A-Car Inc. rents cars to customers whose vehicles are unavailable due to accident, theft, or repair (‘‘Wheels while your car heals’’). The company has a fleet of more than 40,000 cars located at 700 offices throughout the United States and Canada. Its balance sheets at January 31, 2011, and January 31, 2010, contain the following information (all dollar amounts are stated in thousands of dollars):
Required:
1. What is the dollar amount of current assets and current liabilities at January 31, 2011? At January 31, 2010? What does this information tell you about the company’s liquidity?
2. Assume that stockholders were paid dividends of $18,100 during 2010 and that there were no other changes in stockholders’ equity except for net income. How much net income did the business earn during the year?
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