Homework Answers
Liquidity ratio is calculated by dividing current assets by current liabilities.
In the given question, current assets = 200,000 and current liabilities = 50,000
Therefore, 
= 
Hence, liquidity ratio is 4:1.
Option A is the correct answer.
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The current assets of Merriam Company is 200,000 and current liabilities is 50,00. The liquidity ratio...
The liquidity ratio that consists of current assets divided by current liabilities is called the current...
The liquidity ratio that consists of current assets divided by current liabilities is called the current ratio. True or False
Liquidity Current ratio 2014 = current assets/current liabilities 204,000/89,000 = 2.292 for 2014 and 230,000/90,000 =...
Liquidity Current ratio 2014 = current assets/current liabilities 204,000/89,000 = 2.292 for 2014 and 230,000/90,000 = 2.555 for 2015 Quick Ratio = current assets-inventory/current liabilities 204,000-66,000/89000= 1.550 for 2014 and 230,000-75000/90,000 = 1.722 for 2015 Accounts receivable turnover Credit sales/average debts Average debt 75000+82000/2 = 78500 Total sales = 3,199,900/78500 = 40.76 times (2015) Days sales outstanding = average accounts receivable/sales credit 78500/3199900 x 360 = 8.83 days (2015) Inventory turnover 66,000+75,000/2 = 70,500 Inventory turnover ratio = cost of...
Ritter Company has a current ratio of 3.00 on December 31. On that date the company's current assets are as follows:
Working Capital and Short-Term Liquidity Ratios Ritter Company has a current ratio of 3.00 on December 31. On that date the company's current assets are as follows: Cash$32,000Short-term investments49,300Accounts receivable (net)170,000Inventory200,000Prepaid expenses11,600Current assets$462,900Ritter Company's current liabilities at the beginning of the year were $150,000 and during the year its operating activities provided a cash flow of $60,000. a. What are the firm's current liabilities on December 31? b. What is the firm's working capital on December 31? c. What is the quick ratio on December...
A firm's long-term assets = $100,000, total assets = $400,000, inventory = $50,000 and current liabilities...
A firm's long-term assets = $100,000, total assets = $400,000, inventory = $50,000 and current liabilities = $200,000. The industry average current ratio is 2.0 and quick ratio is 1.5. (3 points each) 7.1 What are the firm's current ratio and quick ratio? 7.2 What is the firm's liquidity position? 7.3 What is the firm's net working capital? 7.4 Why is working capital important to a business?
If a company has current assets of $20,160 and current liabilities of $11,200. Its current ratio...
If a company has current assets of $20,160 and current liabilities of $11,200. Its current ratio is 1.8. True or False True False
1. Current Ratio - Current assets/Current liabilities
1. Current Ratio - Current assets/Current
liabilities
Gaia Vallante Gaia Vallante Assets Liabilities & Equity Current assets: Current liabilities: Cash 4,592 Accounts receivable...
Gaia Vallante Gaia Vallante Assets Liabilities & Equity Current assets: Current liabilities: Cash 4,592 Accounts receivable 2,952 1,080 3,168 7,200 1,680 4,928 11,200 Accounts payable Accruals Notes payable Total current liabilities Inventories 0 1,012. 5 5,737.5 6,750 8,250 15,000 0 0 5,400 5,400 6,600 12,000 Total current assets Net fixed assets: Long-term bonds Total debt Net plant and equipment 8,800 8,800 Common equity Common stock 2,600 1,400 Retained earnings 3,250 1,750 5,000 20,000 Total common equity 4,000 16000 Total assets...
assets Total current liabilities Debt Ratio C. Debt ratio -the proportion of a company's assets financed...
assets Total current liabilities Debt Ratio C. Debt ratio -the proportion of a company's assets financed with debt. Debt ratio = Total Liabilities Total Assets D How transactions affect the ratios Given the following balances: Current Assets $150,000 Current Liabilities 75,000 Total Assets Total Liabilities 300,000 120,000 1. What is net working capital? 2. What are the current and debt ratios? 3. How would the following transactions affect the current ratio & the debt ratio (Improve, Deteriorate, No Change)? a....
1) How is working capital calculated? a. current assets * current liabilities b. current assets minus...
1) How is working capital calculated? a. current assets * current liabilities b. current assets minus current liabilities c. current assets plus current liabilities d. current assets / current liabilities 2) Which of the following evaluates data over a period of time? a. ratio analysis b. financial analysis c. vertical analysis d. horizontal analysis 3) Which of the following applies to ratio analysis? a. it uses financial statement data from the same accounts and compares it to different years b....
On December 31, 2021, Sandhill Company had $1 million of current assets and $810,000 of current...
On December 31, 2021, Sandhill Company had $1 million of current assets and $810,000 of current liabilities. On the same day, Indigo Company had $340,000 of current assets and $150,000 of current liabilities. Calculate the working capital and current ratio for both companies. (Round current ratio answers to 2 decimal places, eg. 1.76:1) Indigo Sandhill Working Capital $ Current Ratio Which liquidity measure is more relevant? liquidity measure is more relevant.
A firm's long-term assets = $100,000, total assets = $400,000, inventory = $50,000 and current liabilities = $200,000. The industry average current ratio is 2.0 and quick ratio is 1.5. (3 points each) 7.1 What are the firm's current ratio and quick ratio? 7.2 What is the firm's liquidity position? 7.3 What is the firm's net working capital? 7.4 Why is working capital important to a business?
If a company has current assets of $20,160 and current liabilities of $11,200. Its current ratio is 1.8. True or False True False
1. Current Ratio - Current assets/Current
liabilities
Gaia Vallante Gaia Vallante Assets Liabilities & Equity Current assets: Current liabilities: Cash 4,592 Accounts receivable 2,952 1,080 3,168 7,200 1,680 4,928 11,200 Accounts payable Accruals Notes payable Total current liabilities Inventories 0 1,012. 5 5,737.5 6,750 8,250 15,000 0 0 5,400 5,400 6,600 12,000 Total current assets Net fixed assets: Long-term bonds Total debt Net plant and equipment 8,800 8,800 Common equity Common stock 2,600 1,400 Retained earnings 3,250 1,750 5,000 20,000 Total common equity 4,000 16000 Total assets...
assets Total current liabilities Debt Ratio C. Debt ratio -the proportion of a company's assets financed with debt. Debt ratio = Total Liabilities Total Assets D How transactions affect the ratios Given the following balances: Current Assets $150,000 Current Liabilities 75,000 Total Assets Total Liabilities 300,000 120,000 1. What is net working capital? 2. What are the current and debt ratios? 3. How would the following transactions affect the current ratio & the debt ratio (Improve, Deteriorate, No Change)? a....
On December 31, 2021, Sandhill Company had $1 million of current assets and $810,000 of current liabilities. On the same day, Indigo Company had $340,000 of current assets and $150,000 of current liabilities. Calculate the working capital and current ratio for both companies. (Round current ratio answers to 2 decimal places, eg. 1.76:1) Indigo Sandhill Working Capital $ Current Ratio Which liquidity measure is more relevant? liquidity measure is more relevant.
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