Problem 3-9 Current and Quick Ratios The Nelson Company has $1,812,500 in current assets and $625,000...

Problem 3-9
Current and Quick Ratios

The Nelson Company has $1,812,500 in current assets and $625,000 in current liabilities. Its initial inventory level is $437,500, and it will raise funds as additional notes payable and use them to increase inventory.

How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.4? Round your answer to the nearest cent.

$

What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places.

Expert Solution

NOTES PAYABLE = 223214.29

QUICK RATIO = 1.62

jeff jeffy answered 2 years ago

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