In this exercise, you will discuss the impact of cash payment against the accounts payable on the current ratio of a company. In addition, you will perform a vertical analysis against the entries listed on the financial statement. Task 1: A company has a current ratio of two. The CFO decides to pay off a portion of its accounts payable with cash. Explain whether the current ratio will increase, decrease, or remain unchanged. Support your answer with appropriate rationale. Task 2: Based on the attached financial information, perform a vertical analysis, list the steps performed, and provide an explanation for your analysis. Year-2010 Amount in Dollars Sales Year-2009 Amount in Dollars 1,00,000 79,900 47,500 39,950 750 500 9,500 9,000 expenses 12,000 12,000 Net income 30,250 18,450 Cost of goods sold Operating expenses Selling expenses Administrative Submission Requirements: Submit your answers in a Microsoft (MS) Word file. Font: Arial, 12 point, double-spaced Page 1 AC1420: Week 5 Financial Statement Analysis Evaluation Criteria: Criteria Did you correctly analyse the Points Assigned Points Earned 20% current ratio based on the given information? Did you support your analysis of 20% current ratio with appropriate rationale? Did you follow the appropriate 20% steps to conduct vertical analysis for the given financial information? Did you calculate all information as 20% a percent of sales? Did you correctly explain the 20% development of certain cost component
Is this your assignment or some part of it?
We can do it for you! Click to Order!
