This problem uses the financial statements for the Genatron Manufacturing Corporation for the years 2017 and 2016 from Problem 6.

Data from Problem 6

a. Calculate Genatron’s dollar amount of net working capital in each year.

b. Calculate the current ratio and the acid test ratio in each year.

c. Calculate the average collection period and the inventory turnover ratio in each year.

d. What changes in the management of Genatron’s current assets seem to have occurred between the two years?

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Genatron Mamufacturing Corporation Balance Sheet 2017 2016 ASSETS Cash $40,000 $50,000 Accts. receivable 260,000 200,000 Inventory 500,000 450,000 Total current assets 800,000 700,000 Fixed assets, net 400,000 300,000 Total assets $1,200,000 $1,000,000 LIABILITIES AND EQUITY Accts. payable $170,000 $130,000 Bank loan 90,000 90,000 Accruals 70,000 50,000 Total current liabilities 330,000 270,000 Long-term debt, 12% 400,000 300,000 Common stock, $10 par 300,000 300,000 Capital surplus 50,000 50,000 Retained earnings 120,000 80,000 Total liabilities & equity $1,200,000 $1,000,000