The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.   Balance Sheet (Millions of $)     Assets   2018 Cash and securities   $3,000 Accounts receivable   15,000 Inventories   18,000 Total current assets   $36,000 Net plant and equipment   $24,000 Total assets   $60,000 Liabilities and Equity     Accounts payable   $18,630 Accruals   8,370 Notes payable   6,000 Total current liabilities   $33,000       Long-term bonds   $9,000 Total liabilities   $42,000 Common stock   $5,040 Retained earnings   12,960 Total common equity   $18,000 Total liabilities and equity   $60,000       Income Statement (Millions of $)   2018 Net sales   $84,000 Operating costs except depreciation 78,120 Depreciation   1,680 Earnings before interest and taxes (EBIT) $4,200 Less interest   900 Earnings before taxes (EBT)   $3,300 Taxes   1,320 Net income   $1,980       Other data:     Shares outstanding (millions)   500.00 Common dividends (millions of $)   $693.00 Int rate on notes payable & L-T bonds 6% Federal plus state income tax rate 40% Year-end stock price   $47.52 ​   Refer to Exhibit 4.1. What is the firm's current ratio?  Do not round your intermediate calculations.   a. 1.23   b. 0.87   c. 1.09   d. 0.85   e. 1.17

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
icon
Related questions
Question
Practice Pack

The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
 

Balance Sheet (Millions of $)    
Assets  

2018

Cash and securities  

$3,000

Accounts receivable  

15,000

Inventories  

18,000

Total current assets  

$36,000

Net plant and equipment  

$24,000

Total assets  

$60,000

Liabilities and Equity    
Accounts payable  

$18,630

Accruals  

8,370

Notes payable  

6,000

Total current liabilities  

$33,000

     
Long-term bonds  

$9,000

Total liabilities  

$42,000

Common stock  

$5,040

Retained earnings  

12,960

Total common equity  

$18,000

Total liabilities and equity  

$60,000

     
Income Statement (Millions of $)   2018
Net sales  

$84,000

Operating costs except depreciation

78,120

Depreciation  

1,680

Earnings before interest and taxes (EBIT)

$4,200

Less interest  

900

Earnings before taxes (EBT)  

$3,300

Taxes  

1,320

Net income  

$1,980

     
Other data:    
Shares outstanding (millions)  

500.00

Common dividends (millions of $)  

$693.00

Int rate on notes payable & L-T bonds

6%

Federal plus state income tax rate

40%

Year-end stock price  

$47.52

 


Refer to Exhibit 4.1. What is the firm's current ratio?  Do not round your intermediate calculations.
  a.
1.23
  b.
0.87
  c.
1.09
  d.
0.85
  e.
1.17
Expert Solution
trending now

Trending now

This is a popular solution!

video

Learn your way

Includes step-by-step video

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education