IGF Foods Company is a large, primarily domestic, consumer foods company involved in the manufacture, distribution and

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IGF Foods Company is a large, primarily domestic, consumer foods company involved in the manufacture, distribution and sale of a variety of food products. Industry averages are derived from Troy's The Almanac of Business and Industrial Financial Ratios. Following are the 2018 and 2017 comparative balance sheets for IGF. (The financial data we use are from actual financial statements of a well-known corporation, but the company name used is fictitious and the numbers and dates have been modified slightly.)
IGF Foods Company is a large, primarily domestic, consumer foods

Liquidity refers to a company's cash position and overall ability to obtain cash in the normal course of business. A company is said to be liquid if it has sufficient cash or is capable of converting its other assets to cash in a relatively short period of time so that currently maturing debts can be paid.
Required:
1. Calculate the current ratio for IGF for 2018. The average ratio for the stocks listed on the New York Stock Exchange in a comparable time period was 1.5. What information does your calculation provide an investor?
2. Calculate IGF's acid-test or quick ratio for 2018. The ratio for the stocks listed on the New York Stock Exchange in a comparable time period was .80. What does your calculation indicate about IGF's liquidity?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Intermediate Accounting

ISBN: 9781259722660

9th Edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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