EnviroFriend Structures, Inc., builds environmentally sensitive structures. The companys 2018 revenues totaled $2,780 million. At December 31,
Question:
EnviroFriend Structures, Inc., builds environmentally sensitive structures. The company’s 2018 revenues totaled $2,780 million. At December 31, 2018, and 2017, the company had, respectively, $656 million and $591 million in current assets. The December 31, 2018, and 2017, balance sheets and income statements reported the following amounts:
Requirements
1. Describe each of EnviroFriend Structures, Inc.’s, liabilities and state how the liability arose.
2. What were the company’s total assets at December 31, 2018?
3. Assume that beginning and ending inventories for both periods did not differ by a material amount. Accounts payable at the end of 2016 was $188 million. Calculate accounts payable turnover as a ratio and days’ payable outstanding (DPO) for 2017 and 2018. Calculate current ratios for 2017 and 2018 as well. Evaluate whether the company improved or deteriorated from the standpoint of its ability to cover accounts payable and current liabilities over the year.
Step by Step Answer:
Financial Accounting
ISBN: 978-0134725987
12th edition
Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.