Turnbull Taffy Limited’s figures at 31 March 2013 show the following working capital items: The company’s finance director is preparing a projected statement of financial position for 31 March 2014 as...

The company’s finance director is preparing a projected statement of financial position for 31 March 2014 as part of a package of information to be presented to a bank from which the company hopes to obtain a long-term loan.

The finance director estimates that there will be the following changes to working capital between 31 March 2013 and 31 March 2014:

Inventory will decrease by 10%

Trade receivables will decrease by 15%

Cash at bank will increase by 50%

Trade payables will decrease by 5%

Required:

i) Calculate (to two decimal places) the current ratio and the quick ratio at 31 March 2013.

ii) Calculate (to two decimal places) the expected current ratio and quick ratio at 31 March 2014 based on the finance director’s estimates.