Rainsoft Company Selected Data from the Financial Statements Are Provided

question 145

Multiple Choice

Rainsoft Company Selected data from the financial statements are provided below:
$\begin{array}{llc}& \underline { 2015 }& \underline { 2014 }& \underline {2013 }\\ \text { Cash } &\$ 44,000 & \$ 28,000 & \$ 14,000 \\ \text { AccountsReceivable } &84,000 & 32,000 & 114,400 \\ \text { Inventory } &44,000 & 166,000 & 100,000 \\ \text {Prepaid Expenses } &\underline {46,000} & \underline {36,000} & \underline {41.600}\\ \text { Total Curent Assets } &\$ 218,000 & \$ 262,000 & \$ 270,000\\\\ \text { Total Current Liabilities } &\$ 130,000 & \$ 144,000 \\ \text { Net Credit Sales } &442,000 & 652,000 \\ \text { Cost of Goods Sold } &336,000 & 598,000 \\ \text { Net Cash Flows from Operating Activities } &32,000 & 58,000\end{array}$
-Refer to Rainsoft Company.Which of the following statements is true regarding the company's liquidity?

• A)Based on the current ratio and operating cash flow ratio,the company appears to be in a worse position to pay its current obligations at the end of 2015 compared to 2014.
• B)The quick ratio decreased from 2014 to 2015.
• C)The operating cash flow ratio increased from 2014 to 2015.
• D)Based on the quick ratio and cash ratio,the company appears to be in a better position to pay its current obligations at the end of 2015 compared to 2014.

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Definitions:

Psychological Problems

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Eating Disorders

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