Current ratio Current ratio is one type of liquidity ratios , it link between current assets and current liabilities. Thumb rule for current ratio is 1.5: 1. The current assets are cash, marketable securities, accounts receivable , merchandise inventory prepaid expenses and so on. Current liabilities are accounts payable, short term notes payable, short term bonds and so on. To calculate: The current ratio of Company 3M for Company K on January 1, 2017 and 2016.

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Answer 1

Question

Chapter 10, Problem 10.17E

(a)

To determine

Current ratio

Current ratio is one type of liquidity ratios, it link between current assets and current liabilities. Thumb rule for current ratio is 1.5: 1. The current assets are cash, marketable securities, accounts receivable, merchandise inventory prepaid expenses and so on. Current liabilities are accounts payable, short term notes payable, short term bonds and so on.

To calculate: The current ratio of Company 3M for Company K on January 1, 2017 and 2016.

(b)

To determine

To calculate: The current ratio for Company M for the year 2017, if the company used $300 million cash to pay off $300 million of accounts payable.

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Answer 2

Question

Chapter 10, Problem 10.17E

(a)

To determine

Current ratio

Current ratio is one type of liquidity ratios, it link between current assets and current liabilities. Thumb rule for current ratio is 1.5: 1. The current assets are cash, marketable securities, accounts receivable, merchandise inventory prepaid expenses and so on. Current liabilities are accounts payable, short term notes payable, short term bonds and so on.

To calculate: The current ratio of Company 3M for Company K on January 1, 2017 and 2016.

(b)

To determine

To calculate: The current ratio for Company M for the year 2017, if the company used $300 million cash to pay off $300 million of accounts payable.

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Answer 3

Question

Chapter 10, Problem 10.17E

(a)

To determine

Current ratio

Current ratio is one type of liquidity ratios, it link between current assets and current liabilities. Thumb rule for current ratio is 1.5: 1. The current assets are cash, marketable securities, accounts receivable, merchandise inventory prepaid expenses and so on. Current liabilities are accounts payable, short term notes payable, short term bonds and so on.

To calculate: The current ratio of Company 3M for Company K on January 1, 2017 and 2016.

(b)

To determine

To calculate: The current ratio for Company M for the year 2017, if the company used $300 million cash to pay off $300 million of accounts payable.

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Answer 4

Question

Chapter 10, Problem 10.17E

(a)

To determine

Current ratio

Current ratio is one type of liquidity ratios, it link between current assets and current liabilities. Thumb rule for current ratio is 1.5: 1. The current assets are cash, marketable securities, accounts receivable, merchandise inventory prepaid expenses and so on. Current liabilities are accounts payable, short term notes payable, short term bonds and so on.

To calculate: The current ratio of Company 3M for Company K on January 1, 2017 and 2016.

(b)

To determine

To calculate: The current ratio for Company M for the year 2017, if the company used $300 million cash to pay off $300 million of accounts payable.

Expert Solution & Answer

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Answer 5

Chapter 10, Problem 10.17E

(a)

To determine

Current ratio

Current ratio is one type of liquidity ratios, it link between current assets and current liabilities. Thumb rule for current ratio is 1.5: 1. The current assets are cash, marketable securities, accounts receivable, merchandise inventory prepaid expenses and so on. Current liabilities are accounts payable, short term notes payable, short term bonds and so on.

To calculate: The current ratio of Company 3M for Company K on January 1, 2017 and 2016.

(b)

To determine

To calculate: The current ratio for Company M for the year 2017, if the company used $300 million cash to pay off $300 million of accounts payable.

Answer 6

Chapter 10, Problem 10.17E

(a)

To determine

Current ratio

Current ratio is one type of liquidity ratios, it link between current assets and current liabilities. Thumb rule for current ratio is 1.5: 1. The current assets are cash, marketable securities, accounts receivable, merchandise inventory prepaid expenses and so on. Current liabilities are accounts payable, short term notes payable, short term bonds and so on.

To calculate: The current ratio of Company 3M for Company K on January 1, 2017 and 2016.

Answer 7

Chapter 10, Problem 10.17E

(a)

To determine

Current ratio

Current ratio is one type of liquidity ratios, it link between current assets and current liabilities. Thumb rule for current ratio is 1.5: 1. The current assets are cash, marketable securities, accounts receivable, merchandise inventory prepaid expenses and so on. Current liabilities are accounts payable, short term notes payable, short term bonds and so on.

To calculate: The current ratio of Company 3M for Company K on January 1, 2017 and 2016.

Answer 8

(b)

To determine

To calculate: The current ratio for Company M for the year 2017, if the company used $300 million cash to pay off $300 million of accounts payable.

Answer 9

(b)

To determine

To calculate: The current ratio for Company M for the year 2017, if the company used $300 million cash to pay off $300 million of accounts payable.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 10 - Prob. 1Q Ch. 10 - Prob. 2Q Ch. 10 - Prob. 3Q Ch. 10 - Prob. 4Q Ch. 10 - Prob. 5Q Ch. 10 - (a) Identify three taxes commonly paid by...Ch. 10 - Prob. 7Q Ch. 10 - Prob. 8Q Ch. 10 - Contrast these types of bonds: (a) Secured and...Ch. 10 - Prob. 10Q

Solution Summary: The author explains that current ratio is one type of liquidity ratios, it link between current assets and current liabilities. Current assets are cash, marketable securities, accounts receivable, merchandise inventory prepaid expenses and so on.

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To calculate: The current ratio for Company M for the year 2017, if the company used $300 million cash to pay off $300 million of accounts payable.

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