ABC Company has current assets of $150,000 (of which $60,000 is inventory and prepaid expenses) and current liabilities of $50,000. Calculate: a. The current ratio b. The acid-test ratio c. If the company borrows $25,000 cash from a bank on a 90-day note, what will its current ratio be? d. What will the new acid-test ratio be?

ABC Company has current assets of $150,000 (of which $60,000 is inventory and prepaid expenses) and current liabilities of $50,000. Calculate: a. The current ratio b. The acid-test ratio c. If the company borrows $25,000 cash from a bank on a 90-day note, what will its current ratio be? d. What will the new acid-test ratio be?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 2P: Vigo Vacations has $200 million in total assets, $5 million in notes payable, and $25 million in...

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