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 (2.85:1) on December 31. On that date the company\'s current assets are as follows: Cash Short-term investments Accounts receivable (net Inventory $16,400 49,000 169,000 200,000 11,600 $446,000 Prepaid expenses Current assets Bell Company\'s current liabilities at the beginning of the year were $137,000 and during the year its operating activities provided a cash flow of $55,000 a. What are the firm\'s current liabilities on December 31? Round answer to the nearest whole number 156,491 b. What is the firm\'s working capital on December 31? Round answer to the nearest whole number 289,509 V C. What is the quick ratio on December 31? Round answer to 2 decimal places. 1.5 d. What is the Bell\'s operating-cash-flow-to-current-liabilities ratio? Round answer to 2 decimal places. Check

Solution

Solution:

In the given case study answers for question number (a) - (c) is already there correctly, only answer for question number (d) is missing, hence I\'m going to calculate the answer for question number (d) only.

(d) Operating cash flow to Current Liabilities ratio = Operating cash flow/current Liabilities

   = 55000/156491

   = ?0.35 or 0.35:1

?** The answer is rounded off to the two decimel place.

** I have assumed that only the last question answer is required to be solved and I have done the same accordingly.

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