1. What is the company's current ratio?
2. What is the company's quick ratio?
3. If the company's competitor has a current ratio of 2.50x, which company is in a better working capital position and why?
4. What is the company's Days Sales Outstanding (DSO)? If the industry average are 75 days, what does this tell us about how long it takes for the company to collect its AR?
5. What is the company's Days Payables Outstanding (DPO)? If the industry average are 90 days, what does this tell us about how long it takes for the company to pay its vendors?
6. What are several changes the company can make to its working capital policy that may improve their overall working capital management? Please elaborate on your suggestions.

Current Assets (total) = $300,000
Accounts Receivable = $200,000
Inventory = $100,000
Current Liabilities (total) = $200,000
Accounts Payable - $150,000

Annual Sales - $750,000
Annual Cost of Goods Sold - $500,000

Answer rating: 100% (QA)

Analyzing the Companys Working Capital Lets break down the questions and analyze the companys working capital based on the information provided Curren... View the full answer