Question

Suppose these selected condensed data are taken from recent balance sheets of Bob Evans Farms (in thousands). 2022 2021 Cash $13,700 $9,900 Accounts receivable 22,900 19,900 Inventory 30,200 30,800 Other current assets 12,700 11,909 Total current assets $79,500 $72,509 Total current liabilities $275,000 $303,600 Compute the current ratio for each year.

Answer 1

2022 2021

Current ratio = Current assets $79,500 $72,509

Current liabilities $275000 $303600

0.29:1 0.24:1

Step-by-step explanation:

Current ratio is the relationship between current assets and current liabilities. It is a short-term liquidity ratio. The division of current assets by current liabilities gives current ratio.

Answer 2

The current ratios for 2022 and 2021 are 0.29 and 0.24 respectively.

Step-by-step explanation:

Given the following information about Bob Evans farms

2022 ($'000) 2021 ($'000)

Cash 13,700.00 9,900.00

Accounts receivable 22,900.00 19,900.00

Inventory 30,200.00 30,800.00

Other current assets 12,700.00 11,909.00

Total current assets 79,500.00 72,509.00

Total current liabilities 275,000.00 303,600.00

Current ratio (79500/275000) (72509/303,600)

0.29 0.24

Current ratio = current assets/current liabilities

The current ratios for 2022 and 2021 are 0.29 and 0.24 respectively.