Question

The following information is available for Flanders and its two main competitors in the industry, Sanders and Anders:

	Flanders	Sanders	Anders
Cash	$ 9,800	$10,500	$26,500
Short-term investments	6,400	8,200	12,500
Accounts receivable	12,500	8,500	14,350
Merchandise inventory	30,150	40,000	40,150
Prepaid expense	900	6,750	2,450
Accounts payable	19,400	13,750	26,800
Salaries payable	1,200	3,500	6,250
Other current payables	600	1,200	2,150

Required:

1. Calculate the current ratio and acid-test ratio for each firm.

                                     Flanders        Sanders               Anders

Current ratio:                 

Acid test Ratio:                 

Answer 1