Question Content Area The following information pertains to Tanzi Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Cash and short-term investments $41,912 Accounts receivable (net) 29,707 Inventory 28,654 Property, plant and equipment 293,074 Total Assets $393,347 Liabilities and Stockholders' Equity Current liabilities $58,253 Long-term liabilities 97,633 Stockholders' equity-common 237,461 Total Liabilities and stockholders' equity $393,347 Income Statement Sales $80,900 Cost of goods sold 36,405 Gross margin $44,495 Operating expenses 25,209 Net income $19,286 Number of shares of common stock 6,546 Market price of common stock $35 What is the current ratio for this company? Round your answer to two decimal places. Select the correct answer. 1.23 2.22 0.72 1.72
Question Content Area The following information pertains to Tanzi Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Cash and short-term investments $41,912 Accounts receivable (net) 29,707 Inventory 28,654 Property, plant and equipment 293,074 Total Assets $393,347 Liabilities and Stockholders' Equity Current liabilities $58,253 Long-term liabilities 97,633 Stockholders' equity-common 237,461 Total Liabilities and stockholders' equity $393,347 Income Statement Sales $80,900 Cost of goods sold 36,405 Gross margin $44,495 Operating expenses 25,209 Net income $19,286 Number of shares of common stock 6,546 Market price of common stock $35 What is the current ratio for this company? Round your answer to two decimal places. Select the correct answer. 1.23 2.22 0.72 1.72
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question Content Area
The following information pertains to Tanzi Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.
Assets
Cash and short-term investments $41,912
Accounts receivable (net) 29,707
Inventory 28,654
Property, plant and equipment 293,074
Total Assets
$393,347
Liabilities and Stockholders' Equity
Current liabilities $58,253
Long-term liabilities 97,633
Stockholders' equity-common 237,461
Total Liabilities and stockholders' equity $393,347
Income Statement
Sales $80,900
Cost of goods sold 36,405
Gross margin $44,495
Operating expenses 25,209
Net income $19,286
Number of shares of common stock 6,546
Market price of common stock $35
What is the current ratio for this company? Round your answer to two decimal places.
Select the correct answer.
1.23
2.22
0.72
1.72
Expert Solution
Step 1
Current ratio: It implies to a financial ratio that measures the immediate liquidity of the business. In other words, it measures the financial ability of the business i.e. how much a business is able to pay it's short term obligations by using it's current assets. The higher the current ratio, the more efficient the business is, in managing it's short term liabilities.
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