The following statement of financial position accounts and amounts were
The following statement of financial position accounts and amounts were for Classic Ltd. on October 31:
Required:
a. Prepare a classified comparative statement of financial position for Classic Ltd. as at October 31, 2016.
b. Calculate the amount of Classic’s working capital (current assets minus current liabilities) at the end of its fiscal years 2016 and 2015. Has the company’s working capital position improved or deteriorated during this period?
c. Calculate Classic’s current ratios at the end of its fiscal years 2016 and 2015. Has its current ratio improved or deteriorated during this period?
d. Calculate Classic’s quick ratios at the end of its fiscal years 2016 and 2015. Has the company’s quick ratio improved or deteriorated during this period?
e. Based on the results from parts “b,” “c,” and “d,” do you think Classic’s overall liquidity position improved or deteriorated during this period?
f. How might Classic evaluate whether its overall liquidity is adequate?
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