You have been provided with the following three years of information about the current assets and liabilities
Question:
Required:
a. Calculate the current ratio for each year.
b. Evaluate the liquidity position of Ignace. Interpret the trend over the three-year period.
c. Examine the information provided and explain why the current ratio changed over the period. In your response consider the changes in the individualaccounts.
Transcribed Image Text:
Ignace Ltd Current Assets and Current Liabilities On December 31 2017 2016 2015 CURRENT ASSETS Cash Inventories Accounts receivable Prepaid expenses Total current assets S 64,354 1,957,525 432,089 3,468 $2,497,436 S 44,391 1,852,441 471,029 50,573 $2,418,434 S 36,567 1,743,253 448,476 39,054 $2,267,350 CURRENT LIABILITIES Bank loans Accounts payable Dividends payable Long-term debt coming due Total current liabilities $ 336,841 981,491 48,927 110,525 $1,477,784 S 530,718 964,736 6,748 21,151 $1,663,353 $778,646 1,018,505 46,709 54,255 $1,898,115
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a Current Ratio Current Assets Current Liabilities 2015 2267350 1898115 119 2016 2418434 1663353 145 ...View the full answer
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