Question 1 You have been tasked to evaluate the financial health and working capital policy of...

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Question 1 You have been tasked to evaluate the financial health and working capital policy of Yoyo Co. The extracts of the balance sheet as at 31 December 2019 and income statement for the year ended are as follows: Balance sheet $'000 Income Statement $'000 Current assets Sales 20,000 Inventory 2,500 Cost of Sales 15,000 Accounts receivables 4,250 Cash 4,000 Current liabilities Accounts payables 2,750 2,500 Short-term bank loan Companies which are similar to Yoyo Co have the following average metrics for 2019: Inventory days 57 days Accounts receivable days 55 days Accounts payables days 60 days Current ratio 2.4x Quick ratio 1.7x Question 1 You have been tasked to evaluate the financial health and working capital policy of Yoyo Co. The extracts of the balance sheet as at 31 December 2019 and income statement for the year ended are as follows: Balance sheet $'000 Income Statement $'000 Current assets Sales 20,000 Inventory 2,500 Cost of Sales 15,000 Accounts receivables 4,250 Cash 4,000 Current liabilities Accounts payables 2,750 2,500 Short-term bank loan Companies which are similar to Yoyo Co have the following average metrics for 2019: Inventory days 57 days Accounts receivable days 55 days Accounts payables days 60 days Current ratio 2.4x Quick ratio 1.7x

Answer rating: 100% (QA)

To evaluate the financial health and working capital policy of Yoyo Co we need to compare the companys financial metrics with the industry averages an... View the full answer