Working capital management is so critical in the organization. The following information below was obtained concerning the
Question:
Working capital management is so critical in the organization. The following information below was obtained concerning the liquidity of the business.
2018 2017
Km Km
Sales revenue 2,065.0 1,788.7
Cost of sales 1,478.6 1,304.0
Gross profit 586.4 484.7
Current assets
Inventories 119.0 109.0
Accounts receivable 400.9 347.4
Short-term investments 4.2 18.8
Cash at bank and in hand 48.2 48.0
572.3 523.2
Current Liabilities
Short Loans and overdrafts 49.1 35.3
Corporation taxes 62.0 46.7
Dividend 19.2 14.3
Accounts payable 370.7 324.0
501.0 420.3
Net current assets 71.3 102.9
Calculate for each year:
- working capital
- the Current ratio
- The acid test ratio
- The Debtors' ratio
- The Creditors' ratio
- Comment on the working capital/liquidity of the company.
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw