PolarGrid Technologies has current assets of $120,000 (of which $48,000 is inventory and prepaid items) and current liabilities of $50,000. a. What is the current ratio? b. What is the acid-test ratio? c. If the company borrows $20,000 cash from a bank on a 150-day loan, what will its current ratio be? d. What will the acid-test ratio be after the loan?
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- a company has current assets of $87,000 (of which $43,000 is inventory and prepaid items) and current liabilities of $43,000. What is the current ratio? What is the acid-test ratio? If the company borrows $14,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be? Current Ratio enter the ratio rounded to 2 decimal places :1 Acid Test Ratio enter the ratio rounded to 2 decimal places :1 New Current Ratio enter the ratio rounded to 2 decimal places :1 New Acid Test Ratio enter the ratio rounded to 2 decimal places :1A. 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.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”?
- (Ratio Computation and Analysis; Liquidity) As loan analyst for Utrillo Bank, you have been presented the following information. Check the image for information. Each of these companies has requested a loan of $50,000 for 6 months with no collateral offered. Because your bank has reached its quota for loans of this type, only one of these requests is to be granted.InstructionsWhich of the two companies, as judged by the information given above, would you recommend as the better risk and why? Assume that the ending account balances are representative of the entire year.To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year. The amount of working capital The current ratio The acid-test ratio The average collection period (The accounts receivable at the beginning of last year totaled $250,000) The average sales period (The inventory at the beginning of last year totaled $500,000) The operating cycle The total asset turnover. (The total assets at the beginning of last year were $2,420,000) The debt-to-equity ratio The times interest earned ratio The equity multiplier (The total stockholder’s equity at the beginning of last year totaled $1,420,000) 2. For both this year and last year A. Present the balance sheet in common-size format B. Present the income statement in common-size format down through net income Could you please help me answer Question 10, 2A, and 2B?To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year. The amount of working capital The current ratio The acid-test ratio The average collection period (The accounts receivable at the beginning of last year totaled $250,000) The average sales period (The inventory at the beginning of last year totaled $500,000) The operating cycle The total asset turnover. (The total assets at the beginning of last year were $2,420,000) The debt-to-equity ratio The times interest earned ratio The equity multiplier (The total stockholder’s equity at the beginning of last year totaled $1,420,000) Could you please help me answer 7-9?
- To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year. The amount of working capital The current ratio The acid-test ratio The average collection period (The accounts receivable at the beginning of last year totaled $250,000) The average sales period (The inventory at the beginning of last year totaled $500,000) The operating cycle The total asset turnover. (The total assets at the beginning of last year were $2,420,000) The debt-to-equity ratio The times interest earned ratio The equity multiplier (The total stockholder’s equity at the beginning of last year totaled $1,420,000) 2. For both this year and last year A. Present the balance sheet in common-size format B. Present the income statement in common-size format down through net income Could I please have somed help with Question 10 with a breakdown of the explanation?What will be the firm's operating cycle on these financial accounting question?a) Explain the significance of financing with accounts payable. b) Explain (including computations) the rationale of taking a cash discount, such as 2/15, n/40. c) Additionally, determine the approximate balance of accounts payable, if a company stretches its payables to 60 days and on average, they make purchases of $1,000,000 per day from their vendors. d) Explain what the stretching accomplishes if the vendors should be paid in 40 days.
- Suppose a firm has the following information: Accounts payable =$1 million; notes payable = $1.1 million; short-term debt =$1.4 million; accruals = $500,000; and long-term bonds = $3 million.What is the amount arising from operating current liabilities?($1.5 million)Ace Industries has current assets equal to $3 million. The company's current ratio is 1.5, and its quick ratio is 1.1. What is the firm's level of current liabilities? What is the firm's level of inventories? Do not round intermediate calculations. Round your answers to the nearest dollar. Current liabilities: $ Inventories: $Dallas Company's current ratio is 4 to 3. The company is negotiating a loan, and the company's management understands that a higher (i.e., better) current ratio will reduce the company's cost of borrowing (interest rate). Which of the following transactions will improve Houston Company's current ratio? Select one: a. making a payment on a long-term debt b. using cash to pay current liabilities c. purchasing inventory on account d. collecting on some of the company's accounts receivable e. none of the above