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Working Capital and Current Ratio The following data (in thousands) were taken from recent financial...

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Accounting

Working Capital and Current Ratio

The following data (in thousands) were taken from recent financial statements of Starbucks Corporation:

Year 2 Year 1
Current assets $124,157 $89,925
Current liabilities 32,933 24,370

a. Compute the working capital and the current ratio for Year 2 and Year 1. Enter working capital amounts in thousands of dollars. Round "current ratio" answers to two decimal places.

Year 2 Year 1
Working capital $fill in the blank 1 $fill in the blank 2
Current ratio fill in the blank 3 fill in the blank 4

b. What conclusions concerning the company's ability to meet its financial obligations can you draw from part (a)? Starbucks' working capital

increaseddecreased

from Year 1 to Year 2 by $fill in the blank 6. Starbucks's current ratio

increaseddecreased

in Year 2. The changes in working capital and current ratio indicate that short-term creditors

should beshould not be

concerned about receiving payment from Starbucks.

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