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A company has current assets of $720,000 and current liabilities of $350,000. The board of directors declares a cash dividend of $300,000. a. What is the current ratio after the declaration but before payment? b. What is the current ratio after the payment of the dividend?

A company has current assets of $720,000 and current liabilities of $350,000. The board of directors declares a cash dividend of $300,000. a. What is the current ratio after the declaration but before payment? b. What is the current ratio after the payment of the dividend?

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter7: Financial Activities
Section: Chapter Questions
Problem 2CIC
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A company has current assets of $720,000 and current liabilities of $350,000. The board of directors declares a cash dividend of $300,000. a. What is the current ratio after the declaration but before payment? b. What is the current ratio after the payment of the dividend?
Transcribed Image Text:A company has current assets of $720,000 and current liabilities of $350,000. The board of directors declares a cash dividend of $300,000. a. What is the current ratio after the declaration but before payment? b. What is the current ratio after the payment of the dividend?
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