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Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.                                            Assets                                                        Cash and short-term investments $  40,000 Accounts receivable (net) 30,000 Inventory 25,000 Property, plant, and equipment   215,000 Total assets $310,000                      Liabilities and Stockholders’ Equity                              Current liabilities $ 60,000 Long-term liabilities 95,000 Common stock, $10 par 60,000 Retained earnings 95,000 Total liabilities and stockholders’ equity $310,000 ​                                  Income Statement                                         Sales $90,000 Cost of goods sold   45,000 Gross margin $45,000 Operating expenses   20,000 Net income $25,000   Number of shares of common stock 6,000 Market price of common stock $20 ​ What is the current ratio?   a. 0.67   b. 1.42   c. 1.58   d. 1.17

Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.                                            Assets                                                        Cash and short-term investments $  40,000 Accounts receivable (net) 30,000 Inventory 25,000 Property, plant, and equipment   215,000 Total assets $310,000                      Liabilities and Stockholders’ Equity                              Current liabilities $ 60,000 Long-term liabilities 95,000 Common stock, $10 par 60,000 Retained earnings 95,000 Total liabilities and stockholders’ equity $310,000 ​                                  Income Statement                                         Sales $90,000 Cost of goods sold   45,000 Gross margin $45,000 Operating expenses   20,000 Net income $25,000   Number of shares of common stock 6,000 Market price of common stock $20 ​ What is the current ratio?   a. 0.67   b. 1.42   c. 1.58   d. 1.17

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PB
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  1. Brock Company's financial information is listed below. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.

                                               Assets                                                       

    Cash and short-term investments

    $  40,000
    Accounts receivable (net)

    30,000
    Inventory

    25,000
    Property, plant, and equipment

      215,000
    Total assets

    $310,000



                         Liabilities and Stockholders’ Equity                             

    Current liabilities

    $ 60,000
    Long-term liabilities

    95,000
    Common stock, $10 par

    60,000
    Retained earnings 95,000
    Total liabilities and stockholders’ equity

    $310,000

    ​

                                     Income Statement                                        

    Sales

    $90,000
    Cost of goods sold

      45,000
    Gross margin

    $45,000
    Operating expenses

      20,000
    Net income

    $25,000

     

    Number of shares of common stock

    6,000
    Market price of common stock

    $20

    ​

    What is the current ratio?

      a.
    0.67
      b.
    1.42
      c.
    1.58
      d.
    1.17
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