Harold Limited’s condensed financial statements provide the following information:
(a) Determine the following:
1. Current ratio at December 31, 2011
2. Acid-test ratio at December 31, 2011
3. Accounts receivable turnover for 2011
4. Inventory turnover for 2011
5. Days payables outstanding for 2011
6. Rate of return on assets for 2011
7. Profit margin on sales
(b) Prepare a brief evaluation of the financial condition of Harold Limited and of the adequacy of its profits.
(c) In examining the other current liabilities on Harold Limited’s balance sheet, you observe that unearned revenues have declined in the current year compared with the previous year. Is this a positive indicator about the client’s liquidity? Explain.

  • CreatedAugust 23, 2015
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