The Nelson Company has $1,352,000 in current assets and $520,000 in current liabilities. Its initial inventory level is $395,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar. $______________ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places. Quick ratio ____________
The Nelson Company has $1,352,000 in current assets and $520,000 in current liabilities. Its initial inventory level is $395,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar. $______________ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places. Quick ratio ____________
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 8P
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The Nelson Company has $1,352,000 in current assets and $520,000 in current liabilities. Its initial inventory level is $395,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.0? Do not round intermediate calculations. Round your answer to the nearest dollar.
$______________
What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places.
Quick ratio ____________
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