Question

Roy’s Toys is a manufacturer of toys and children’s products. The following are selected items appearing in a recent balance sheet (dollar amounts are in millions):
Cash and short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 47.3
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159.7
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.3
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.0
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130.1
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279.4
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344.0
a. Using the information above, compute the amounts of Roy’s Toys
(1) Quick assets and
(2) Total current assets.
b. Compute for Roy’s Toys the
(1) Quick ratio,
(2) Current ratio, and
(3) Dollar amount of working capital. (Round ratios to one decimal place.)
c. Discuss whether Roy’s Toys appears liquid from the viewpoint of a short-term creditor.



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  • CreatedApril 17, 2014
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