Calculate the value of inventory given the following information: current ratio = 2.20; quick ratio =...

Calculate the value of inventory given the following information: current ratio = 2.20; quick ratio = 1.80; current assets = $275.

a. 50

b. 60

c. 80

d. 70

e. 40

Solutions

Expert Solution

Current liabilities = Current assets / Current ratio = $275 / 2.20 = $125

Quick ratio = (Current assets - Inventory) / Current liabilities

1.8 = ($275 - Inventory) / $125

1.8 * $125 = $275 - Inventory

$225 = $275 - Inventory

Inventory = $275 - $225

Inventory = $50

jeff jeffy answered 1 year ago

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