Current Position Analysis The following items are reported on a company's balance sheet: Cash $120,000 Marketable securities 40,000 Accounts receivable (net) 50,000 Inventory 90,000 Accounts payable 150,000 Determine (a) the current ratio and (b) the quick ratio. Round your answers to one decimal place. a. Current ratio b. Quick ratio
Current Position Analysis The following items are reported on a company's balance sheet: Cash $120,000 Marketable securities 40,000 Accounts receivable (net) 50,000 Inventory 90,000 Accounts payable 150,000 Determine (a) the current ratio and (b) the quick ratio. Round your answers to one decimal place. a. Current ratio b. Quick ratio
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Current Position Analysis
The following items are reported on a company's balance sheet:
Cash
$120,000
Marketable securities
40,000
Accounts receivable (net)
50,000
Inventory
90,000
Accounts payable
150,000
Determine (a) the current ratio and (b) the quick ratio. Round your answers to one decimal
place.
a. Current ratio
b. Quick ratio
Expert Solution
Step 1
A ratio that provides information regarding the capability of a company to pay off its current liabilities, as well as the company’s margin of safety, is term as the liquidity ratios.
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