Foundations of Finance (9th Edition) (Pearson Series in Finance)
9th Edition
ISBN: 9780134083285
Author: Arthur J. Keown, John D. Martin, J. William Petty
Publisher: PEARSON
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Chapter 4, Problem 5SP
Summary Introduction
To determine: Additional short term funding.
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(Evaluating liquidity) The Allen Marble Company has a target current ratio of 2.0 but has experienced some difficulties financing its expanding sales in the past few months. At present, the firm has current assets of $2.5 million and a current ratio of 2.5. If Allen expands its
receivables and inventories using its short-term line of credit, how much additional short-term funding can it borrow before its current ratio standard is reached?
The addition to current assets is $
(Round to the nearest dollar.)
(Liquidity analysis) The Mitchem Marble Company has a target current ratio of 2.1 but has
experienced some difficulties financing its expanding sales in the past few months.
At present, the firm has a current ratio of 2.7 and current assets of $2.15 million. If Mitchem
expands its receivables and inventories using its short-term line of credit, how much
additional short-term funding can it borrow before its current ratio standard is reached?
...
The additional amount of receivables and inventories (short-term debt) is $ = |million.
(Round to two decimal places.)
The Mitchem marble Company has a target current ratio of 2.2 but has experienced some difficulties financing its expanding sales in the past few months. At present, the firm has a current ratio of 2.7 and current assets of $2.38 million. If Mitchem expands its receivable and inventories using its short-term line of credit, how much additional short-term funding can it borrow before its current ratio standard is reached?
Chapter 4 Solutions
Foundations of Finance (9th Edition) (Pearson Series in Finance)
Ch. 4 - Describe the five-question approach to using...Ch. 4 - What are the limitations of industry average...Ch. 4 - What is the difference between a firms gross...Ch. 4 - Prob. 9RQCh. 4 - Prob. 11RQCh. 4 - Prob. 1SPCh. 4 - (Evaluating profitability) The Malia Corporation...Ch. 4 - (Evaluating profitability) Last year, Stevens,...Ch. 4 - (Price/ book) Chang, Inc.s balance sheet shows a...Ch. 4 - Prob. 5SP
Ch. 4 - (Ratio analysis) The balance sheet and income...Ch. 4 - (Analyzing operating return on assets) The D.A....Ch. 4 - (Evaluating liquidity) The Tabor Sales Company had...Ch. 4 - (Evaluating current and proforma profitability)...Ch. 4 - (Financial analysis) The T. P. Jarmon Company...Ch. 4 - (Economic Value Added) K. Johnson, Inc.’s managers...Ch. 4 - Prob. 16SPCh. 4 - Prob. 17SPCh. 4 - Prob. 18SPCh. 4 - Prob. 1MCCh. 4 - Prob. 2MCCh. 4 - Prob. 3MCCh. 4 - Prob. 4MC
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