In: Accounting
The following financial information isfor Chesapeake Corporation are for the fiscal years ending 2018 & 2017 (all balances are normal):
Item/Account | 2018 | 2017 |
Cash | 25,000 | $24,000 |
Accounts Receivable | 55,000 | 52,000 |
Inventory | 44,000 | 48,000 |
Current Liabilities | 85,000 | 42,000 |
Net Sales (all credit) | 550,000 | 485,000 |
Cost of Goods Sold | 288,000 | 265,000 |
Use this information to determine the number of current ratio as of December 31, 2018: (Round & enter your answers to one decimal place and enter the value.)
answer 1.5 times
current ratio=current asset/current liabilities
normally current asset included cash or cash equivalents,inventory,accounts recievable,prepaid liabilities etc..
here, current assets=cash+inventory+accounts recievable
current assets for 2018=$25000+$44000+$55000=$124000
normally current liabilities include accounts payable,short term debts,dividends etc..
current liabilities for 2018=$85000
current ratio=$124000/$85000=1.5 times