The following items are reported on a company's balance sheet: Cash $247,900 Marketable securities 88,000 Accounts...

The following items are reported on a company's balance sheet:

Cash	$247,900
Marketable securities	88,000
Accounts receivable	261,900
Inventory	192,700
Accounts payable	278,100

Round your answers to two decimal places.

a. Determine the current ratio.

b. Determine the quick ratio.

Solutions

Expert Solution

Answer:-

a)- Current Ratio=Current Assets/ Current Liabilities

=$247900+88000+261900+192700/$278100

= $790500/$278100

=2.84 times

b) Acid-test (Quick ratio):- Current assets-Inventory-Prepaid expenses/Current Liabilities

=$790500-$192700/$278100

=$597800/$278100 =2.15 times

ekkarill92 answered 1 year ago

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