EBK CFIN
6th Edition
ISBN: 9781337671743
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 2, Problem 7PROB
Summary Introduction
To determine: Current Liabilities and Inventory
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GRX, Inc. has a current ratio of 4:1. Which of the following transactions wouldnormally increase its current ratio?
a. Purchasing inventory on account b. Purchasing machinery for cashc. Selling inventory on accountd. Collecting on account receivable
Compute the Quick ratio if Current Assets: 10.354; Current Liabilities: 6.615; Inventory: 5.767; Cash: 1.013.
a) 0.69 times
b) 0.75 times
c) 0.72 times
d) 0.15 times
1. Current assets is P20,000, current liabilities is P30,000. What is the current ratio?
2. Inventory is P15,000; Accounts Payable is P45,000. Cash and accounts receivable total P8,000.
What is the current ratio?
What is the quick ratio?
3. If current ratio is 1.5, what is the total accounts receivable if cash is P220,000, inventory is P75,000,
and accounts payable is P330,000?
4. Cash is 30% of total current assets. If current ratio is 2.5, what is the new current ratio if total
noncash current assets grow by 50%?
5. The total asset is P1,500,000. Sales is P4,500,000. What is the asset turnover?
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Compute the Quick ratio if Current Assets: 11.436; Current Liabilities: 5.414; Inventory: 4.456; Cash: 2.024.arrow_forwardCalculate the following ratios and interpret the results: (Use the information attached with the paper). Debt to Capitalization ratio Acid test ratio Inventory turnover ratio (in days) Times interest earned ratioarrow_forwardFind the following using the data bellow a. Accounts receivable B. Current assets C. Total assets D. Return on assets E. Common equity F. Quick ratioarrow_forward
- 1. If current assets amounted to P600,000 and current liabilities amounted to P200,000, what is the current ratio of the entity? *a. P800,000b. P400,000c. 3d. 1/3 3. If net sales is P200,000 and the average accounts receivable is P50,000, what is the accounts receivable turnover ratio? *a. 4b. 1/4c. P150,000d. P250,000 5. If total assets amounted to P800,000 and total liabilities amounted to P200,000, what is the debt to equity ratio? *a. 4b. 0.3333c. 0.25d. 3arrow_forwardWe are given the following information for Pettit Corporation. Sales (credit) Cash Inventory Current liabilities Asset turnover Current ratio Debt-to-assets ratio Receivables turnover $2,068,000 150,000 923,000 763,000 a. Accounts receivable b. Marketable securities c. Capital assets. d. Long-term debt $ Current assets are composed of cash, marketable securities, accounts receivable, and inventory. Calculate the following balance sheet items: LA LA LA $ $ 1.00 times 2.60 times $ 40 % 4 times 517000arrow_forwardFollowing are the financial statements of AB Ltd. for 2010. From the aforementioned table, calculate the following: 1. Current ratio 2. Liquid ratio 3. Receivables turnover ratio and collection period 4. Inventory turnover and holding period 5. Fixed assets turnover 6. Total assets turnover 7. Debt ratio 8. D/E ratio 9. Interest coverage ratio 10. PAT margin 11. ROA 12. ROE 13. EPS 14. D/P ratio 15. P/E ratio 16. Book value per sharearrow_forward
- Which of the following is included in the numerator of the Acid-Test Ratio calculation (check all that apply) A. Supplies B. Net Current Receivables C. Short-Term Investments D. Merchandise Inventory Which of the following ratios helps measure a company's ability to pay its current liabilities? (check all that apply) A. Accounts Receivable Turnover B. Days' Sales in Inventory C. Acid Test Ratio D. Cash Ratioarrow_forwardFind the following using the data bellow Accounts receivable = 111,100,000 Current assets = 316,500,000 Total assets = 600,000,000 A. Return on assets B. Common equity C .Quick ratioarrow_forwardAssuming that all sales were on account, calculate the following risk ratios for 2024. Risk Ratios1. Receivables turnover ratio 38.3 times2. Average collection period 9.5 days3. Inventory turnover ratio 15.1 times4. Average days in inventory 24.2 days5. Current ratio 4.0 6. Acid-test ratio ? 7. Debt to equity ratio ? %8. Times interest earned ratio ? timesarrow_forward
- Select the Income Statements and Balance Sheets of Aramco Saudi from the calculate the following financial ratios: a. Long-term debt ratios b. Total debt ratio c. Times interest earned d. Cash coverage ration e. current ratio f. Quick ratio g. Operating profit margin h. Inventory Turnover i. Days in inventory j. Average collection period k. Return on equity I. Return on assets m. Payout rationsarrow_forwardJustine Company has current assets of P400,000 and current liabilities ofP500,000. Justine Company's current ratio would be increased by: A. The collection of P100,000 of accounts receivable.B. The purchase of P100,000 of inventory on account.C. The payment of P100,000 of accounts payable.D. Refinancing a P100,000 long-term loan with short-term debtarrow_forward3. If net sales is P200,000 and the average accounts receivable is P50,000, what is the accounts receivable turnover ratio? * а. 4 b. 1/4 c. P150,000 d. P250,000 5. If total assets amounted to P800,000 and total liabilities amounted to P200,000, what is the debt to equity ratio? * а. 4 b. 0.3333 c. 0.25 d. 3 9. If the operating expenses of the company amounted to P50,000, gross sales amounted to P420,000 and sales discounts amounted to P20,000, how much is the operating expenses to sales ratio? * a. 0.125 b. 8 c. 0.119 d. 8.4arrow_forward
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