Submitted by: Submitted by tropicallily
Views: 61
Words: 569
Pages: 3
Category: Business and Industry
Date Submitted: 10/27/2014 10:29 PM
THE NIAGARA PARKS COMMISSION
Liquidity Analysis
Current Ratio 2003 Current Ratio 2004
Current assets / current Liabilities Current assets / current Liabilities
= 10974/19305 = 8931/8064
= 0.05: 1 = 1.1: 1
The margin of safety for the Niagara Parks Commission (N.P.C) is overall low. In 2004 although the assets have decreased there is less debt in relation to assets and therefore the liquidity or the ability for the company to pay of its debts it greater. However in the event that assets have to be liquidated to pay off the debts it is unlikely that the firm would liquidate all assets since some assets are less liquid than others therefore an Acid test would be more realistic.
|Acid test ratio 2003 |Acid test ratio2004 |
|=Current assets –Inv.- pp exp |=Current assets –Inv.- pp exp |
| |Current liabilities |
|Current liabilities | |
| |= 8931-5287-604 |
|= 10974-6291-339 |8064 |
| |= 3040 |
|19305 |8064 |
| |...