Selected balance sheet and income statement information for jewelry retailer, Sparkle & Co. for 2014 through 2016 follows:
A. Compute the current ratio for each year and discuss any trends. Do you feel that the company is sufficiently liquid? Explain. What additional information might be helpful in analyzing the liquidity?
B. Compute times interest earned for each year and discuss any trends. Do you have any concerns about its level of financial leverage and its ability to meet interest obligations? Explain.

Question

Selected balance sheet and income statement information for jewelry retailer, Sparkle & Co. for 2014 through 2016 follows:
  A. Compute the current ratio for each year and discuss any trends. Do you feel that the company is sufficiently liquid? Explain. What additional information might be helpful in analyzing the liquidity?
B. Compute times interest earned for each year and discuss any trends. Do you have any concerns about its level of financial leverage and its ability to meet interest obligations? Explain.

Quizplus · Accepted Answer

The Answer of Selected balance sheet and income statement information for jewelry retailer, Sparkle & Co. for 2014 through 2016 follows:
  A. Compute the current ratio for each year and discuss any trends. Do you feel that the company is sufficiently liquid? Explain. What additional information might be helpful in analyzing the liquidity?
B. Compute times interest earned for each year and discuss any trends. Do you have any concerns about its level of financial leverage and its ability to meet interest obligations? Explain.

Selected Balance Sheet and Income Statement Information for Jewelry Retailer