CLW makes wood furniture, including chairs and tables. Demand has risen quickly over the past 3 years and the business needs to increase the scale of production at its factory. The factory is located near the city centre in an area of low unemployment. The Finance Director has produced a business plan, including a balance sheet. The Finance Director is pleased with CLW’s liquidity.
- extract of financial info.JPG (21.27 KiB) Viewed 194 times
15 Do you think the Finance Director is right to be pleased with the liquidity of CLW in 2014? Justify your
answer using the data in the Table and appropriate ratios. [6]
Possible KN Points:
• Current assets increased
• Current liabilities fallen
•Current ratio improved
• Acid test value fallen
• Cash fallen
• Trade receivables down