Give true answer with correct calculation for this financial accounting question A company has current assets of $90,000 (ofwhich $40,000 is inventory and prepaid items) and currentliabilities of $40,000.a. What is the current ratio?b. What is the acid-test ratio?c. If the company borrows $15,000 cash from a bank ona 120-day loan, what will its current ratio be? What will theacid-test ratio be?

Step 1: Define Liquidity RatiosLiquidity ratios are a group of ratios used in financial statement…

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Justine Company has current assets of P400,000 and current liabilities ofP500,000. Justine Company's current ratio would be increased by: A. The collection of P100,000 of accounts receivable.B. The purchase of P100,000 of inventory on account.C. The payment of P100,000 of accounts payable.D. Refinancing a P100,000 long-term loan with short-term debt
A. Provide exercises. Here are sample questions: • Current assets is PHP2,000, current liabilities is PHP3,500. What is current ratio? • Inventory is PHP150. Accounts payable is PHP450. Cash and accounts receivable total PHP800. What is the current ratio? Quick ratio? • If current ratio is 1.7, what is the total accounts reccivable if cash is PHP20,000, inventory is PHP7,500, and accounts payable is PHP30,000. • Cash is 30% of total current assets. If current ratio is 2.3, what is the new current ratio if total non-cash current assets grow by 50%? B. 1. compute the ratios of the sample companies and ask them to compare the three companies using the ratios computed. 2014 B. 2 what are the possible reason why the sample companies bave different ratios. What could have possibly caused these differences? What are the implications? B. 3 How to interpret the liquidity ratios? B 4. Which ratio is more relevant - quick ratio or current ratio? B 5. What other factors would a barık or supplier…
A. Provide exercises. Here are sample questions: Current assets is PHP2,000, current liabilities is PHP3,500. What is current ratio? Inventory is PHP150. Accounts payable is PHP450. Cash and accounts receivable total PHP800. What is the current ratio? Quick ratio? If current ratio is 1.7, what is the total accounts receivable if cash is PHP20,000, inventory is PHP7,500, and accounts payable is PHP30,000. Cash is 30% of total current assets. If current ratio is 2.3, what is the new current ratio if total non-cash current assets grow by 50%? B. 1. compute the ratios of the sample companies and ask them to compare the three companies using the ratios computed. B. 2 what are the possible reason why the sample companies have different ratios. What could have possibly caused these differences? What are the implications? B. 3 How to interpret the liquidity ratios? B4. Which ratio is more relevant - quick ratio or current ratio? B 5. What other factors would a bank or supplier look into in…
A firm has $ 1.2 million in current assets and $ 1 million in current liabilities. If the company uses $ 0.5 million of cash to pay part of its accounts payable, what will happen to the “current ratio”?
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.
Please answer it within 45mins,it would be helpful!!! Which pair of ratios would provide the MOST USEFUL information to a bank providing a long-term loan to a business? Group of answer choices: Gearing and interest cover Return on equity and EPS Asset turnover and ration of expenses to sales ROCE and gross profit margin
please help me solve this equation
Refer to the 10-K for Abercrombie & Fitch. Required: 1. What does the company report for the following accounts for the most current fiscal year: Enter your answer in thousands. a. Cash b. Short-term investments (or marketable securities) c. Accounts receivable d. Inventory e. Other current assets f. Accounts payable g. Other current liabilities h. Cash flow from operations A A AA A A 好 2. The company projects the following to occur in the next fiscal year: • Accounts payable will decrease by 25%. • Other current liabilities are expected to increase by 33%. • Cash flow from operations is expected to decrease by 32%. Assume all other items remain unchanged from the prior year. Provide the next year's forecasted balances for the following accounts and cash flow from operations.
Which of the following would result when a company lends cash to a customer in exchange for a ten month note receivable? a. a noncurrent asset and an investing cash flow are created. b. a noncurrent asset and a financing cash flow are created. c. a current asset and a financing cash flow are created. d. a current asset and an investing cash flow are created.
Baker & Co. has applied for a loan from the Trust Us Bank in order to invest in several potential opportunities. In order to evaluate the firm as a potential debtor, the bank would like to compare Baker & Co. with the industry. Balance Sheet December 31 December 31 Income Statement For the year ended Dec 31, 2021 2020 2021 Assets Sales (100% credit) 1,330 Cash 305 270 Less: Cost of goods sold 760 Accounts receivable 275 290 Gross profit 570 Inventory 600 580 Operating expenses 30 Current assets 1,180 1,140 Depreciation 200 Plant and equipment 1,700 1,940 Net operating income 340 Less: acc depr -500 -600 Less: Interest expense 57 Net plant and equipment 1,200 1,340 Net income before taxes 283 Total assets 2,380 2,480 Less: Taxes 96 Net income 187 Liab. and Owners' Equity Accounts payable 150 200 Notes payable 125 - Current liabilities 275 200 Bonds payable 500 500…
An analyst has projected that a company will have assets of €2,000 at year-end and liabilities of €1,200. Th e analyst’s projection of total owners’ equity should be closest to: B . €2,000.
Owe

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