Calculate the 2010 current and quick ratios based on the projected balance sheet and income statement data.
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(1) To managers to help run the business,
(2) To bankers for credit analysts, and
(3) To stockholders for stock valuation.
Would these different types of analysts have an equal interest in the liquidity ratios?
The first part of the case, presented in Chapter 7, discussed the situation that Computron Industries was in after an expansion program. Thus far, sales have not been up to the forecasted level, costs have been higher than were projected, and a large loss occurred in 2009, rather than the expected profit. As a result, its managers, directors, and investors are concerned about the firms survival. Donna Jamison was brought in as assistant to Fred Campo, Computrons chairman, who had the task of getting the company back into a sound financial position. Computrons 2008 and 2009 balance sheets and income statements, together with projections for 2010, are shown in the following tables. Also, the tables show the 2008 and 2009 financial ratios, along with industry average data. The 2010 projected financial statement data represent Jamisons and Campos best guess for 2010 results, assuming that some new financing is arranged to get the company over thehump. Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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