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# Calculate the current ratio and quick ratio for the latest two years, obtain the industry average ratios fromIBISWorld, and analyze the results. This database contains industry reports and market...

• Calculate the current ratio and quick ratio for the latest two years, obtain the industry average ratios fromIBISWorld, and analyze the results.
• This database contains industry reports and market research on more than 1,300 United States industries. The reports provide key data, financial ratios, and benchmarks, plus industry forecasts. IBISWorldâ€™s Data Wizard tool allows comparisons between a chosen company and industry best practices.
• Discuss what each of these ratios tells you about the companyâ€™s current financial condition, and how they compare to the industry averages.
• Identify the major causes of any changes in these ratios and discuss your assessment of the company based on these changes.
• Review the balance sheet and the notes to the most recent financial statements, and identify any contingent liabilities.
• Discuss whether or not you agree with how the company chose to treat each contingency on the financial statements (i.e., recorded vs. disclosed, but not recorded).
• Discuss the effect on the financial statements of the companyâ€™s treatment of the contingency.
• Discuss whether the contingent liabilities change your assessment of the company.
Answered Same Day Jul 15, 2021

## Solution

Tanmoy answered on Jul 15 2021
Ratio Analysis of Adobe v. Industry
Particulars
2018
2017
Cu
ent Assets
4857039
7247813
Cu
ent Liabilities
4301126
3527457
Cash and Cash Equivalents
1642775
2306072
Short Term Investments
1586187
3513702
Trade Receivables, net of allowances for Doubtful Debt
1315578
1217968
Â
Â
Â
ent Ratio
1.13
2.05
Industry Cu
ent Ratio
1.10
1.10
1.06
2.00
Industry Quick Ratio
0.90
1.00
Cu
ent ratio of a firm states its ability to meet the short term or cu
ent obligations. The ideal cu
ent ratio is 2:1. This means the cu
ent ratio is twice the cu
ent liabilities. It indicates satisfactory position of the firm. For Adobe we can observe that the cu
ent ratio in 2018 is 1.13 and in 2017 it is 2.05. While the industry in which Adobe operates and as per IBIS World report is 1.10 in both 2018 & 2017. From this it can be...
SOLUTION.PDF