CURRENT RATIO The Stewart Company has $1,009,500 in current assets and $434,085 in current liabilities. Its...

Question

Question

Answer 1

Answer #1

Current Assets = $1009500

Current Liabilities = $434085

Let the short term debt be x

Hence, Current Ratio = Current Assets / (Current Liabilities + Short Term Debt)

The current ratio needs to be >= 2

Hence, 2 = 1009500 / (434085 + x)

=> 434085 + x = 1009500/2

=> x = 1009500/2 - 434085 = $70665

Answer 2

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