Working Capital and Short Term Liquidity Ratios Bell Company

Working Capital and Short Term Liquidity Ratios Bell Company has a current ratio of 2.85 (2 851) on December 31.On that date the company\'s current assets are as follows 16.400 Canh Shors-erm investments Accounts receivable (net) 165,000 Inventory Prepaid espenses.8 Current assets 200000 406,000 Bell Company\'s current Sabilities at the beginning of the year were s137,000 and during the year its operating activities provided a cash flow of $55,000 a. What are the firm\'s current liablities on December 31? Round answer to the nearest whole number 56,491 b. What is the firm\'s working capital on December 31? Round answer to the nearest whole number 289 509 c What is the quick ratio on December 31 Round answer to 2 decimal places d What is the Bei\'s operacing-cash ow.so-current-liablties acie Round answer to 2 decimal places 8 8 9

Solution

a) Current liabilities = 446000/2.85 = 156491 b) Working capital = 446000-156491 = 289509 c) Quick ratio = (16400+49000+169000)/156491 = 1.50 d) Operating cash flow/Current liabilities = 55000/156491 = 0.35