Bauman Company's total current assets, total current liabilities,
and inventory for each of the past 4 years follow:
Item
|
2012
|
2013
|
2014
|
2015
|
Total
current assets
|
$17 comma 01017,010
|
$22 comma 24022,240
|
$22 comma 55022,550
|
$26 comma 22026,220
|
Total
current liabilities
|
9 comma 4809,480
|
12 comma 85012,850
|
13 comma 47013,470
|
16 comma 97016,970
|
Inventory
|
5 comma 4905,490
|
7 comma 2707,270
|
7 comma 6907,690
|
8 comma 0708,070
|
a. Calculate the firm's current and quick ratios for each
year. Compare the resulting time series for these measures of liquidity.
b. Comment on the firm's liquidity over the 2012-2015 period.
c. If you were told that Bauman Company's inventory turnover
for each year in the 2012-2015 period and the industry averages were as follows,
would this information support or conflict with your evaluation in part
(b).?
Why?
Item
|
2012
|
2013
|
2014
|
2015
|
Bauman
Company
|
6.46.4
|
6.96.9
|
7.17.1
|
6.56.5
|
Industry
Average
|
11.911.9
|
12.512.5
|
12.112.1
|
12.312.3
|
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