quidity Analysis) The King Carpet Company has $3,160,000 in cash and a total of $11,160,000 in current assets. The firm's current liabilities equal $6,910,000 such that the firm's current ratio equals 1.6. The company's manag n's cash holdings down to $1,080,000 by paying $545,000 in cash to expand the firm's truck fleet and using $1,535,000 in cash retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
quidity Analysis) The King Carpet Company has $3,160,000 in cash and a total of $11,160,000 in current assets. The firm's current liabilities equal $6,910,000 such that the firm's current ratio equals 1.6. The company's manag n's cash holdings down to $1,080,000 by paying $545,000 in cash to expand the firm's truck fleet and using $1,535,000 in cash retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:(Liquidity Analysis) The King Carpet Company has $3,160,000 in cash and a total of $11,160,000 in current assets. The firm's current liabilities equal $6,910,000 such that the firm's current ratio equals 1.6. The company's managers want to reduce the
firm's cash holdings down to $1,080,000 by paying $545,000 in cash to expand the firm's truck fleet and using $1,535,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
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