Question: The following ratios are available for Lin Inc Instructions (a) Is Lins short-term liquidity improving or deteriorating in 2014? Be specific in your answer, referring

The following ratios are available for Lin Inc

Instructions
(a) Is Lin€™s short-term liquidity improving or deteriorating in 2014? Be specific in your answer, referring to relevant ratios.
(b) Do changes in turnover ratios affect profitability? Explain.
(c) Identify any steps Lin might have taken, or might wish to take, to improve its management of its accounts receivable and inventoryturnovers.

Current ratio Accounts receivable turnover Inventory turnover 2014 1.3:1 12 times 2013 1.5:1 10 times 9 times 11 times

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a At first glance it appears that Lins liquidity had deteriorated over the past year since the companys current ratio has fallen from 151 to 131 Howev... View full answer

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