Question

Dumont Corporation is preparing its 2014 statement of financial position. The company records show the following related amounts at the end of the fiscal year, December 31, 2014:
Required:
1. Compute
(a) The amount of working capital
(b) The quick ratio (show computations).
Why is working capital important to management? How do financial analysts use the quick ratio?
2. Would your computations be different if the company reported $ 250,000 worth of contingent liabilities in the notes to its financial statements? Explain.


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  • CreatedAugust 04, 2015
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