Assuming this data for Outreach Enterprises
For 2019
Total Current Assets= $30,000,000
Total Current Liabilities= $16,000,000
For 2018
Total Current Assets= $25,000,000
Total Current Liabilities= $15,000,000
Explanation:
1. Dollar amount of change simply involves comparing the difference between the total amount of year 2019 and 2018.
Total Current Asset= $30,000,000 - $25,000,000= $5,000,000
Total Current liabilities= $16,000,000-$15,000,000=$1,000,0000
2. The Percentage change is calculated using the formula;
Current ratio= Current Asset/Current liabilities
For 2019= 30,000,000/16,000,000 = 1.87
For 2018= 25,000,000/15,000,000= 1.66
Thus, the calculated changes indicate that the company is doing better since it's working capital change is above 1, and could be invested in by investors.
