Roys Toys is a manufacturer of toys and childrens products. The following are selected items appearing in
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.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello