Problem

Questions

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The following information is given for Toy Company for the past two years: Required: a. Calculate the working capital amount for both years, b. Calculate the current ratio for both years. c. Calculate the acid-test ratio for both years. d. Analyze the company's liquidity by explaining each of your calculations. Classify each amount as Current Asset, Current Liability or NOT Current Asset or Liability. If it is not current, put an X in the space as we will not need the number. If it is current, enter the appropriate amount in the correct column. a. Working Capital Current Assets Current Prior - Current Liabilities = Working Capital b. Current Ratio Current Assets Current Liabilities Current Ratio c. Acid Test Ratio Cash + AR Net + ST Invest Current Liabilities Acid Test Ratio Anaylsis: See problem instructions Problem G