Answer the following requirements A company has current assets of $90,000 (of which$36,000 is inventory and prepaid items) andcurrent liabilities of $36,000.a. What is the current ratio?b. What is the acid-test ratio?c. If the company borrows $16,000 cash from abank on a 120-day loan, what will its current ratiobe?d. What will the acid-test ratio be?

Step 1: Introduction to ratio analysisRatio analysis is a method used to analyze financial…

Answered: A company has current assets of $90,000…

Entrepreneurial Finance

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Chapter5: Evaluating Operating And Financial Performance

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What is the value of current liabilities?
What is the amount of current liabilities?
What is the amount of current liabilities?
provide correct answer. sub. general account.
Answer this financial accounting problem?
A. Yummy Cake Corporation has current assets of $210,000, total assets of $310,000, current liabilities of $230,000, and total liabilities of $245,000. The company is trying to obtain a bank loan for $65,000 which would be financed over six months. The terms of the loan agreement specify that the company's current ratio cannot fall below 1.5. Calculate the current ratio before and after the loan. Do you think the loan will be granted? Explain why? B. Low Carb Corp. has current assets of $320,000, total assets of $400,000, current liabilities of $95,000, and total liabilities of $200,000. The company is trying to negotiate a bank loan of $60,000. The terms of the loan require repayment over two years and state that the debt ratio cannot exceed 0.60. Calculate the debt ratio before and after the bank loan. Do you think the loan will be granted? Explain why.
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Identify the ratio that is relevant to answering each of the following questions.a. How much net income does the company earn from each dollar of sales?b. Is the company financed primarily by debt or equity?c. How many dollars of sales were generated for each dollar invested in fixed assets?d. How many days, on average, does it take the company to collect on credit sales made tocustomers?e. How much net income does the company earn for each dollar owners have invested in it?f. Does the company have sufficient assets to convert into cash for paying liabilities as theycome due in the upcoming year?
The current ratio: a. Is used to help assess a company's ability to pay its debts in the near future. b. Measures the effect of operating income on profit. c. Is used to measure the relationship between assets and long-term debt. d. Is used to measure a company's collection period.
a)Assume that the following data is extracted from the financial statements of Richy-Rich bank: equity is $350 million, interest expense is $115 million, provision for loan loss (P) is $35 million, noninterest income is $30 million, noninterest expense is $50 million and a tax rate is 33%. What is the minimum total interest income required to give a return on equity (ROE) of 20%? Show workings when necessary. b) Be-smart Bank reported an equity multipler ratio of 6.5 at the end of year 2021. If the bank’s total debt at the end of year 2021 was $5 million, how much of its assets were financed with equity? Show calculations when necessary. c) What are the main sources of funding for commercial banks? Using bullet points, classify these sources and briefly describe each category.
Provide correct option is general accounting
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