Liquidity management Bauman Company's total current assets
Not what you're looking for?
Liquidity management Bauman Company's total current assets, net working capital, and inventory for each of the past four years follow:
Item 2005 2006 2007 2008
Total current assets $16,950 $17,450 $18,230 $20,165
Net working capital 7,950 8,760 9,765 12,035
Inventory 7,000 8,150 9,600 8,130
a. Calculate the firm's current and quick ratios for each year. Compare the resulting time series of each measure of liquidity.
b. Comment on the firm's liquidity over the 2005-2008 period.
c. If you were told that Bauman Company's average age of inventory for each year in the 2005-2008 period and the industry averages were as follows, would this support or conflict with your evaluation in part b?explain.
Average age of inventory (in days) 2005 2006 2007 2008
Bauman Company 52.1 53.7 57.9 61.4
Industry average 34.4 32.6 33.8 33.2
Purchase this Solution
Solution Summary
The liquidity management for Bauman Company's total current assets is examined.
Education
- Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
- Bachelor of Commerce, West Bengal University
Recent Feedback
- "I got this feedback and I wanted to know if you can explain it to me. I noticed something within your workings which I believe is incorrect. It looks like you've mistaken the Debt ratio for the Equity Multiplier. You've done a calculation to determine Return on Equity (ROE) but if you take a look at the ratios provided for us you'll see ROE listed on the bottom line already. You can use ROE, Profit Margin and Total Asset Turnover to figure out the Equity Multiplier amount. Equity multiplier is not provided for us and we need to calculate it. I really hope this is helpful to you. "
- "Very attentive to detail. Answers are designed in easy to understand format."
- "Fast response and thorough answer"
- "thank you very much! "
- "thank you so much !!!!!!!"
Purchase this Solution
Free BrainMass Quizzes
Operations Management
This quiz tests a student's knowledge about Operations Management
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.