Financial accounting question The current ratio of a company is 6:1 and its acid-test ratio is 1:1. If the inventoriesand prepaid items amount to $503,000, what is the amount of current liabilities?Current Ratio:The current ratio is the ratio of current assets to current liabilities, which is one ofthe most widely used liquidity ratios. It helps the individual analyze the short-term liquidity of the company.

Formula:Current Ratio = Current Assets / Current LiabilitiesAcid-Test Ratio = (Current Assets -…

Answered: The current ratio of a company is 6:1…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter24: Analysis Of Financial Statements

Section: Chapter Questions

Problem 1SEB

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Calculate the current ratio for each company. Be sure to show your calculations. Current Assets Current Liabilities Company 1 89,378 80,610 Company 2 90,114 19,310 Company 1: Company 2: Comment on the results: Which company has the strongest liquidity position?
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The current ratio of a company is 5:1, and its acid-test ratio is 2:1. If the inventories and prepaid items amount to $450,000, what is the amount of current liabilities? Answer this financial accounting problem. Ans
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Please solve for PART A (liquidity’s current ratio, account receivables turnover, and inventory turnover/profitability’s profit margin, asset turnover, return on assets, and earnings per share) and PART B (return on common stockholder’s equity, debt to assets ratio, and price earnings ratio)
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You are examining a company's balance sheet and find that it has total assets of $30,791, a cash balance of $2,289, inventory of $5,009, current liabilities of $6,021 and accounts receivable of $2,805. What is the company's net working capital?
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