Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger

تمرين 28

Liquidity Ratios
Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years.


Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years.


Refer to the information for Kepler Company above.
Required:
Note : Round all answers to two decimal places.
1. Compute the following ratios for each year: (a) current ratio, (b) quick ratio, (c) receivables turnover (in days), and (d) inventory turnover (in days).
2. CONCEPTUAL CONNECTION Has the liquidity of Kepler improved over the past year? Explain why industrial liquidity performance would be useful information in assessing Kepler's liquidity performance.