The Following Information Was Summarized from the Balance Sheets of the Better

question 227

Essay

The following information was summarized from the balance sheets of the Better Books and Tenacious Texts at December 31, 2016:
REQUIRED:
1. Using the information provided, compute the following for each company at the end of 2016:
a. Current ratio
b. Quick ratio
2. Better Books reported cash flow from operations of $7,500 million during 2016. Tenacious Texts reported cash flow from operations of $7,000 million. Current liabilities reported by Better Books and Tenacious Texts at December 31, 2015, were $13,200 million and $7,700 million, respectively. Compute the cash flow from operations to current liabilities ratio for each company for 2016.
3. Comment briefly on the liquidity of each of these two companies. Which appears to be more liquid?
4. What other ratios would help you more fully assess the liquidity of these companies?

Learn to manage and navigate large datasets through the use of freezing panes and splitting windows.

Understand the impact of cell formatting options and how they affect data presentation.

Develop skills in what-if analysis and goal seeking for decision making based on data variables.

Understand the accounting methods used for uncollectible accounts and the reasons for their use.

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Definitions:

Self-Concept Clarity

The extent to which a person's self-beliefs are clearly and confidently defined, internally consistent, and stable.

Feedback Sensitivity

The degree to which individuals react to feedback, criticism, or praise from others.

Self-Verification

A psychological theory suggesting individuals seek to confirm their self-concept, preferring feedback that aligns with their existing beliefs about themselves.

Effort Justification

The phenomenon whereby people reduce dissonance by convincing themselves that what they suffered for is actually quite valuable.