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The following balance sheet data for Brimstone Company are shown below. a. Determine the working capital and

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The following balance sheet data for Brimstone Company are shown below.


The following balance sheet data for Brimstone Company are shown


a. Determine the working capital and current ratio for 2014 and 2013.
b. Does the change in the current ratio from 2013 to 2014 indicate a favorable or an unfavorabletrend?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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2014 2013 Current assets 1,586,250 $1,210,000 Current liabilities 705,000 550,000

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a b The change from 220 to 225 indicates a fa...View the full answer


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Related Video

The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.

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