Drop-down options: (number value), (number value), (number value), (1.37x, 0.40x, 2.50x, 1.33x), (increase, decrease, stay same).
1.
Working Capital = Current Assets
Thus,
Working capital = $480,000
2
Net working capital = Current assets - Current liabilities
Thus,
Net working capital = 480000 - 360000 = $120,000
3
Non-operating current liabilities = Notes payable = $135,000
Thus,
4.
Current ratio = Current assets/current liabilities
thus,
Current ratio = 480000/360000 = 1.33 x
5.
If inventory purchased with long-term debt, it will increase current assets but will not change current liabilities
thus,
Current ratio will INCREASE
Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
Drop-down options: (number value), (number value), (number value), (1.37x, 0.40x, 2.50x, 1.33x), (increase, decrease, stay same)....
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