Financial ratios: Liquidity. The financial statements for Tyler Toys, Inc. are s

Question

Financial ratios: Liquidity. The financial statements for Tyler Toys, Inc. are shown in the popup window: EEB Calculate the current ratio, quick ratio, and cash ratio e for Tyler Toys for 2013 and 2014. Should any of these ratios or the change in a ratio warrant concerm for the managers of Tyler Toys or the shareholders? What is the current ratio for 2014? (Round to four decimal places.) What is the current ratio for 2013? r(Round to four decimal places.) What is the quick ratio for 2014? (Round to four decimal places.) What is the quick ratio for 2013? (Round to four decimal places.) What is the cash ratio for 2014? n- Round to four decimal places.) What is the cash ratio for 2013 Click to select your answer(s). eshe

Explanation / Answer

The ratio donot look reasonable and managers sholud make appropriate adjustments

Current ratio = Current assets/Current liabilities 2014 2013 Current ratio 1630200/1857200 1504700/1787700 0.8778 0.8417 quick assets = (Current assets- inventory)/current liabilities 2014 2013 Quick assets (1630200-587500) (1504700-563600) 1042700 941100 Quick ratio 1042700/1857200 941100/1787700 0.5614 0.5264 Cash ratio = (cash/current Liabilities 2014 2013 Cash ratio 191000/1857200 188900/1787700 0.1028 0.1057

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