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    Chapter 4 Solution On Language of Business

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    Allen Babasa
    Nkululeko J. Ntshanga owns a manganese ore mining business in South Africa and is seeking additional investment to fund planned expansion. Some potential investors are concerned the funds may be needed to address liquidity problems. Nkululeko provided financial statements showing current assets of R1,438,600 and current liabilities of R1,033,000. Calculations show a working capital of R405,600, current ratio of 1.39, and quick ratio of 1.22. The ratios indicate the company is not experiencing significant liquidity problems.

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    Chapter 4 Solution On Language of Business

    Uploaded by

    Allen Babasa
    78 views2 pages
    Nkululeko J. Ntshanga owns a manganese ore mining business in South Africa and is seeking additional investment to fund planned expansion. Some potential investors are concerned the funds may be needed to address liquidity problems. Nkululeko provided financial statements showing current assets of R1,438,600 and current liabilities of R1,033,000. Calculations show a working capital of R405,600, current ratio of 1.39, and quick ratio of 1.22. The ratios indicate the company is not experiencing significant liquidity problems.

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    Exercise solution

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    Chapter 4 Solution on Language of Business

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    Nkululeko J. Ntshanga owns a manganese ore mining business in South Africa and is seeking additional investment to fund planned expansion. Some potential investors are concerned the funds may be needed to address liquidity problems. Nkululeko provided financial statements showing current assets of R1,438,600 and current liabilities of R1,033,000. Calculations show a working capital of R405,600, current ratio of 1.39, and quick ratio of 1.22. The ratios indicate the company is not experiencing significant liquidity problems.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    78 views2 pages

    Chapter 4 Solution On Language of Business

    Uploaded by

    Allen Babasa
    Nkululeko J. Ntshanga owns a manganese ore mining business in South Africa and is seeking additional investment to fund planned expansion. Some potential investors are concerned the funds may be needed to address liquidity problems. Nkululeko provided financial statements showing current assets of R1,438,600 and current liabilities of R1,033,000. Calculations show a working capital of R405,600, current ratio of 1.39, and quick ratio of 1.22. The ratios indicate the company is not experiencing significant liquidity problems.

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    You are on page 1of 2

    B-04.

    09

    Nkululeko J. Ntshanga owns a manganese ore mining business in South Africa. He is interested in attracting
    additional investors to obtain financing for planned expansion. Some potential investors have expressed a
    concern that money is really being sought to address liquidity problems being faced by Nkululeko's company.

    To alleviate this concern Nkululeko provided the following complete list of assets and liabilities of the company.
    The currency unit is the South African Rand. Use this information to determine the company's current assets,
    current liabilities, working capital, current ratio, and quick ratio. Based on your calculations, does it appear that
    the company is experiencing liquidity problems?

    Accumulated Depreciation R 4,569,000


    Prepaid Rent 45,800
    Note Payable (due in 3 months) 100,000
    Accounts Receivable 468,000
    Accounts Payable 255,000
    Patent 3,000,000
    Cash 790,000
    Supplies 134,800
    Unearned Revenues 133,000
    Equipment 8,777,600
    Interest Payable 45,000
    Loan Payable (due in 3 years) 1,500,000
    Name:
    B-04.09
    Date: Section:

    Current Assets Quick Assets Current Liabilities

    Accumulated Depreciation R 4,569,000


    Prepaid Rent 45,800 R 45,800
    Note Payable (due in 3 months) 100,000 R 100,000
    Accounts Receivable 468,000 468,000 R 468,000
    Accounts Payable 255,000 255,000
    Patent 3,000,000
    Cash 790,000 790,000 790,000
    Supplies 134,800 134,800
    Unearned Revenues 133,000 133,000
    Equipment 8,777,600
    Interest Payable 45,000 45,000
    Loan Payable (due in 3 years) 1,500,000 500000

    1,438,600 1,258,000 1,033,000

    Working Capital :
    405,600

    Current Ratio:
    1.392642788

    Quick Ratio:
    1.21781219748

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