Use the summarized financial information for The J. Willis Holding Company (JWHC) shown in the table...
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Use the summarized financial information for The J. Willis Holding Company (JWHC) shown in the table below for problems 1 through 4. beogra agniblod das al sgrads so) gradulw gniwlio aliens lo nobuc milda lo notrasqal notivsb bicbns & di blupil nisms bluow ads sibono lo simil Revenues CGS Cash & Equivalents Accounts Receivable Inventory Accounts Payable Accruals Notes Payable Tapy dood Last Year $5,700.00 $4,560.00 $714.80 $500.00 $300.00 $320.00 $40.00 $70.00 Current Year $5,050.00 $4,040.00 $120.00 $500.00 $340.00 $300.00 $50.00 $60.00 ponad blow ing sillogaiw] at iblod dess at tio shuni leshond 2.000.0082 lo d 1. For both years, calculate the current ratio, quick ratio, NWC, and WCR. Interpret the values for the current year. Also, discuss the observed two-year trend in solvency. 2. For both years, calculate the CCC (and its components), the NLB, and DCH. Interpret the values for the current year. Also, discuss the observed two-year trend in liquidity. 3. Suppose that a creditor stipulates that JWHC must maintain a quick ratio of 1.50. Use the values for cur- rent liabilities in the current year to calculate the required level of cash holdings and accounts receivable. 4. If the CFO of JWHC wants the firm to target a WCR of So, then what change in current operating assets is required (all else constant)? Use the summarized financial information for The J. Willis Holding Company (JWHC) shown in the table below for problems 1 through 4. beogra agniblod das al sgrads so) gradulw gniwlio aliens lo nobuc milda lo notrasqal notivsb bicbns & di blupil nisms bluow ads sibono lo simil Revenues CGS Cash & Equivalents Accounts Receivable Inventory Accounts Payable Accruals Notes Payable Tapy dood Last Year $5,700.00 $4,560.00 $714.80 $500.00 $300.00 $320.00 $40.00 $70.00 Current Year $5,050.00 $4,040.00 $120.00 $500.00 $340.00 $300.00 $50.00 $60.00 ponad blow ing sillogaiw] at iblod dess at tio shuni leshond 2.000.0082 lo d 1. For both years, calculate the current ratio, quick ratio, NWC, and WCR. Interpret the values for the current year. Also, discuss the observed two-year trend in solvency. 2. For both years, calculate the CCC (and its components), the NLB, and DCH. Interpret the values for the current year. Also, discuss the observed two-year trend in liquidity. 3. Suppose that a creditor stipulates that JWHC must maintain a quick ratio of 1.50. Use the values for cur- rent liabilities in the current year to calculate the required level of cash holdings and accounts receivable. 4. If the CFO of JWHC wants the firm to target a WCR of So, then what change in current operating assets is required (all else constant)?
Expert Answer:
Answer rating: 100% (QA)
1 For both years lets calculate the current ratio quick ratio net working capital NWC and working capital ratio WCR Last Year Current Ratio Current Assets Current Liabilities 71480 50000 30000 32000 4... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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