Answer Happy

Ratio Analysis Assignment Critical Thinking (201.docx la 11 194 13 6 18 19 10 F Ratio Analysis Assignment Firn Current Year Prior Year Net Income 16,000 14,000 Net Sales 75,000 66,000 Current Assets 90,000 79,000 Current Liabilities 19,000 17,000 Listed above is information for a company called Fim. Follow the prompts below listed a-f. 3 12 13 14
17,000 Listed above is information for a company called Fim. Follow the prompts below listed a-f. 1. For Firn calculate the current ratio for the current and prior year. 2. Explain why the current ratio can be a useful metric. 3. Suppose a competitor, Fred, had a current ratio of 1.1 for the current year and 1.1 for the prior year. 4. What does it mean when a company's current ratio is close to 17 5. Which company (Firm or Fred) appears to have better ability to pay short term obligations? Explain your answer. 6. Suppose the industry average current ratio is 2.0. How does this information help you analyze the current ratio for Fir? 7. List three stakeholders who might be interested in using information about a company's current ratio. For each stakeholder, list a type of decision in which the current ratio might be useful. 8. What if there was an economic downturn and Firn is now having trouble collecting its accounts receivable. How would a downturn most likely impact the company's current ratio? Explain. Source: Prof. Deanna Foster, Nichols College MacBook Air >11 44