Your Activity responses should be both grammatically and mechanically correct and formatted in the same fashion as the activity itself. If there is a Part A your response should identify a Part A, etc. In addition you must appropriately cite all resources used in your response and document them in a bibliography using APA style. Part A. Create a worksheet entitle\”Average BS\” in your Apple Solution workbook. Copy and past Apple\’s 1998 to 2002 balance sheets from Supplement I to this new worksheet. Past the copied information into the new worksheet two (2) times (one below the other). For the second set data highlight and delete all of the figures. This is the area where you will compute Apple computer\’s \”average-for-year\” balance sheets for 1999 through 2002. To do this start your computations by adding the cash balance for 1998 to cash account\’s balance for 1999 and divide by 2 in order to derive the \”average\” cash for 1999. [ORIGINAL DATA: Assets Current Asset 1999 1998 Cash and equivalents $1,326.00 $1,481.00 Add 1998\’ s balance and divide by 1999. NEW AVERAGE DATA : Assets current Assets 1999 Cash and equivalents $1,403.50 this gives you the average balance for 1999.] Repeat this procedure for all other accounts and years. (Using copy function can expedite this process.) ( A completed\”Average BS\” worksheet is required.) Part B. Create a worksheet entitled \”Ratios\” in the Apple Solution workbook. Copy and Past Apple\’s 1999-2002 income statements from Supplement I to this new worksheet. Then copy and paste the \”average\” balance sheets, computed in the \”Average BS\” worksheet in Part A (above) below the income statement data in the \”Ratios\” worksheet. Then compute the following short-term liquidity measures and ratios for 1999-2002 in order below both sets of data. (The \”Ratios\” worksheet with twelve (12) measures and ratios is required.) 1. Working Capital 2. Current (Working Capital) Ratio 3. Quick (Acid- Test) Ratio (exclude deferred income tax assets in this computation) 4. Inventory turnover 5. Number of days In Inventory 6. Accounts Receivable Turnover (assume all sales are credit sales) 7. Number of days In account receivable 8. Inventory Conversion Cycle 9. Accounts Payable Turnover (use cost of goods sold as the numerator) 10. Number of days In accounts Payable 11. Net cash Conversion Cycle 12. Liquidity Index (exclude deferred income tax assets in both the numerator and denominator) Part C. Create another workbook (not another worksheet in the Apple Solution workbook) and title it\”PC Charts.\” Use the Chart Wizard in your Excel program to create the following seven \”Line\” chart types which you will use to chart Apple\’s liquidity measures. (Line charts are better for plotting measures over time.) Each chart should be an independent worksheet in the PC Charts workbook with the tabs appropriately labeled for identification purposes. Plot all graphs from 1994 through 2002. And measure and your computation from 1999-2002. (A\”PC Charts\” workbook consisting of seven (7) Charts (worksheets) is required.) 1. Current (Working Capital) Ratio 2. Days in Inventory 3. Days in account Receivable 4. Inventory Conversion Cycle 5. Days in accounts Payable 6. Net Cash Conversion Cycle 7. Liquidity Index. Part D. Discuss why it is necessary to average the balance sheet account but not income statement ones. Part E. Discuss whether Apple\’s inventory-related measures should be adjusted for LIFO reserves or LIFO liquidation.
