Question: The balance sheet for Chico Electronics represented bellow: Chico Electronics Balance sheet As of December 31 20112012 Cash .........................................................10,00013,000 Accounts receivable ..............................30,00040,000 Inventory...............................................160,000200,000 Prepaid expenses
The balance sheet for Chico Electronics represented bellow:
Chico Electronics
Balance sheet
As of December 31
20112012
Cash .........................................................10,00013,000
Accounts receivable ..............................30,00040,000
Inventory...............................................160,000200,000
Prepaid expenses ...................................12,00015,000
Total current assets .................................212,000268,000
Long -term investments .........................40,000040,000
Buildings .....................................................60,00050,000
Equipments ................................................100,00090,000
Total assets412,000448,000
Accounts payable ....................................8,0007,000
Notes payable...........................................12,00015,000
Insurance payable .......................................5,00010,000
Total current liabilities ...............................25,00032,000
Long - term debt .........................................87,000116,000
Total liabilities............................................112,000148,000
Common stock ..........................................300,000300,000
Total Liabilities and Equity412,000448,000
Required:
Evaluate the liquidity of Chico Electronics by Computing and interpreting the following ratios of the company for year 2012, and compare the results with year 2011: (Show all rules and calculations you need to compute)
A. current ratio
B. acid-test ratio
C. net working capital
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