Ch $06$: Assignment $-$ Accounting for Financial Management

Statement #$1$: Blue Hamster's pool of relatively liquid assets, which are available to support the company's current and future sales, decreased from Year $1$ to Year $2.$

This statement is $,$ because:

Blue Hamster's total current liabilities balance increased from $$2,025$ million to $$2,531$ million between Year $1$ and Year $2.$

Blue Hamster's total current asset balance decreased from $$16,875$ million to $$13,500$ million between Year $1$ and Year $2.$

Blue Hamster's total current asset balance increased from $$13,500$ million to $$16,875$ million between Year $1$ and Year $2.$

Statement #$2$: Over the past two years, Blue Hamster Manufacturing Inc. has relied more on the use of short$-$term debt than on long$-$term debt financing.

This statement is $,$ because:

Blue Hamster's total notes payable increased by $$117$ million, while its common stock account increased by $$3,656$ million.

Blue Hamster's total current liabilities decreased by $$469$ million, while its long$-$term debt account decreased by $$1,406$ million.

Blue Hamster's total current liabilities increased by $$469$ million, while its use of long$-$term debt increased by $$1,406$ million.

Statement #$3$: One way to interpret the change in Blue Hamster's accounts receivable balance from Year $1$ to Year $2$ is that more customers purchased new items on credit rather than paying off existing credit accounts.

This statement is $,$ because:

The change from $$5,940$ million to $$7,425$ million reflects a net accumulation of new credit sales.

The $$506$ increase in accounts receivable means either that Year $1\text{'}$s existing credit customers are not paying off their owed balances and new or existing customers are making additional purchases on credit, or that Year $1\text{'}$s credit customers have repaid their owed balances and Year $2$ credit sales have exceeded Year $1\text{'}$s credit sales.

The decrease from $$2531$ million to $$2025$ million$\_$imnlies$\_$anet decrease in$\_$accounts receivable and that more customers are navino off.