The following items are reported on a company's balance sheet: Cash $550,800 Marketable securities 430,300 Accounts receivable (net) 409,100 Inventory 331,000 Accounts payable 662,000 Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Practice Pack

I know in order to find the current ratio you divide your current assets by current liabilities.  I also know in order to find the Quick ratio you divide your quick assets by your current liabilities. But everytime I enter a number it says incorrect.

The following items are reported on a company's balance sheet:
Cash
$550,800
Marketable securities
430,300
Accounts receivable (net)
409,100
Inventory
331,000
Accounts payable
662,000
Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place.
a. Current
ratio
b. Quick ratio
Transcribed Image Text:The following items are reported on a company's balance sheet: Cash $550,800 Marketable securities 430,300 Accounts receivable (net) 409,100 Inventory 331,000 Accounts payable 662,000 Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place. a. Current ratio b. Quick ratio
Expert Solution
Step 1

Ratio analysis helps to analyze the financial statements of the company. The management can take decisions on the basis of these ratios. It is also helpful to compare two or more financial statements.

Better your learning with
Practice Pack
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

Blurred answer
Knowledge Booster
Ratio Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education