Why is liquidity important for businesses?
Liquidity is a relative measure of the nearness to cash of the assets and liabilities of a company. This is an indicator of the length of time before cash is realized. Liquidity is a strong indicator of the ability of a company to pay its current debts.
You might also like to view...
The Code of Federal Regulations is a daily government publication containing proposed rules, final rules, and notice of other actions by federal regulatory agencies.
a. true b. false
Centric Sail Makers manufactures sails for sailboats
The company has the capacity to produce 36,000 sails per year and is currently producing and selling 30,000 sails per year. The following information relates to current production: Sales price per unit $180 Variable costs per unit: Manufacturing $60 Selling and administrative $20 Total fixed costs: Manufacturing $675,000 Selling and administrative $300,000 If a special pricing order is accepted for 5,500 sails at a sales price of $160 per unit, and fixed costs remain unchanged, what is the change in operating income? (Assume the special pricing order will require variable manufacturing costs and variable selling and administrative costs.) A) Operating income decreases by $880,000. B) Operating income increases by $880,000. C) Operating income decreases by $440,000. D) Operating income increases by $440,000.