Swifty Company had $366600 of current assets and $141000 of current liabilities before borrowing $40400 from...
Swifty Company had $366600 of current assets and $141000 of current liabilities before borrowing $40400 from the bank with a 3-month note payable. What effect did the borrowing transaction have on Swifty Company's current ratio?
Homework Answers
Present current ratio = Current assets/Current liabilities = 366600/141000 = 2.60
Current ratio after borrowing = (366600+40400)/(141000+40400) = 2.24
Current ratio is decline after borrowing
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Swifty Company had $366600 of current assets and $141000 of
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