the quick ratio differs from the current ratio a. because prepaid expenses and inventory are excluded...
the quick ratio differs from the current ratio
a. because prepaid expenses and inventory are excluded
b. because prepaid expenses and inventory are excluded and because it measures profitability
Homework Answers
Answer :a. because prepaid expenses and inventory are excluded
Quick Ratio is a liquidity ratio which is used to measure the ability of the company to pay off its immediate liabilities .Quick ratio inclused quick assets which can be readily converted into cash such as Cash and cash equivalents, Short term investments,Accounts Receivables, Marketable securities.
Prepaid expenses and Inventory are not readily converted into cash as prepaid expenses are not recoverable and inventory depends on sales.
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the quick ratio differs from the current ratio
a. because prepaid expenses and inventory are excluded...
Quick assets Inventory and prepaid expenses Other assets Total Assets Current liabilities 10% Bonds payable 896...
Quick assets Inventory and prepaid expenses Other assets Total Assets Current liabilities 10% Bonds payable 896 Preferred stock, $100 par value Common stock, $10 par value Retained earnings Total Liabilities and Stockholders' Equity Dec. 31, 2013 Dec. 31, 2012 $610,000 $562,000 382,000 322,000 4,788,000 4,176,000 $5,780,000 $5,060,000 $634,000 $550,000 1,450,000 1,450,000 480,000 480,000 2,700,000 2,160,000 516,000 420,000 $5,780,000 $5,060,000 For 2013, net sales amount to $12,280,000, net income is $583,600, and preferred stock dividends paid are $39,400. Required Calculate the...
prepaid expenses = $50,000 Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable...
prepaid expenses = $50,000
Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable turnover ratio 3. Net return on total assets 4. Total liabilities to total assets ratio 5. Times interest earned ratio 6. Return on sales 7. Return on equity Sales: $750,000 Cash: $50,000 Inventory: $150,000 Common Stock: $100,000 Accounts Payable: $100,000 Prepaid expenses: $50,000 Long term debt: $200,000 Land and Building: $500,000 Operating Income: $450,000 Taxes: $200,000 Accounts Receivable: $70,000 Retained Earnings: $400,000 Cost of...
(prepaid expenses are $50,000) Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable...
(prepaid expenses are $50,000)
Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable turnover ratio 3. Net return on total assets 4. Total liabilities to total assets ratio 5. Times interest earned ratio 6. Return on sales 7. Return on equity Sales: $750,000 Cash: $50,000 Inventory: $150,000 Common Stock: $100,000 Accounts Payable: $100,000 Prepaid expenses: $50,000 Long term debt: $200,000 Land and Building: $500,000 Operating Income: $450,000 Taxes: $200,000 Accounts Receivable: $70,000 Retained Earnings: $400,000 Cost of...
Instructions For 2017 and 2018, calculate current ratio, quick (acid-test) ratio, inventory turnover and days' inventory...
Instructions For 2017 and 2018, calculate current ratio, quick (acid-test) ratio, inventory turnover and days' inventory outstanding (DIO), accounts receivable turnover, days' sales in average receivables or days' sales outstanding (DSO), accounts payable turnover, days' payable outstanding (DPO), and cash conversion cycle (in days). a. Use the cost of goods sold in the formula for accounts payable turnover. b. Use a 365-day year for calculations as needed. c. Use cell references from prior calculations, if applicable. (Always use cell references...
Instructions For 2017 and 2018, calculate current ratio, quick (acid-test) ratio, inventory turnover and days' inventory...
Instructions For 2017 and 2018, calculate current ratio, quick (acid-test) ratio, inventory turnover and days' inventory outstanding (DIO), accounts receivable turnover, days' sales in average receivables or days' sales outstanding (DSO), accounts payable turnover, days' payable outstanding (DPO), and cash conversion cycle (in days). a. Use the cost of goods sold in the formula for accounts payable turnover. b. Use a 365-day year for calculations as needed. c. Use cell references from prior calculations, if applicable. (Always use cell references...
Short-Term Solvency Ratios (Liquidity Rations) 1. Calculate current ratio and quick/liquid/acid test ratio from the following:...
Short-Term Solvency Ratios (Liquidity Rations) 1. Calculate current ratio and quick/liquid/acid test ratio from the following: A Sundry debtors RO 400,000 Stock RO 160,000 A Marketable securities RO 80,000 Cash RO 120,000 * Prepaid expenses RO 40,000 Bill payables RO 80,000 Sundry creditors RO 160,000 A Debentures RO 200,000 Outstanding Expenses RO 160,000 2 Calculate current ratio and anikliidid tact rastin from the following Short-Term Solvency Ratios (Liquidity Rations) 1. Calculate current ratio and quick/liquid/acid test ratio from the following:...
Where do i locate the ratio analysis such as the current ratio, quick ratio, inventory and...
Where do i locate the ratio analysis such as the current ratio, quick ratio, inventory and a/r turnover on a income report for coco-cola and/or pepsi?
An acid-test ratio, also known as the quick ratio, that is much smaller than the current...
An acid-test ratio, also known as the quick ratio, that is much smaller than the current ratio indicates that: Multiple Choice prepaid expenses represent a small portion of current assets, Inventories represent a small portion of current assets inventories represent a large portion of current assets equipment represents a small portion of current assets
Compute the (1) current ratio and the (2) quick ratio for Nikey, Inc. using the following...
Compute the (1) current ratio and the (2) quick ratio for Nikey, Inc. using the following excerpt from the balance sheet reported in a recent financial statement of Nikey, Inc. At May 31 (in millions) 2020 Current assets Cash and equivalents $6,934 Short-term investments 3,730 Accounts receivable, net 6,044 Inventories 7,807 Deferred income taxes 700 Prepaid expenses and other current assets 3,542 Total current assets $28,757 Current liabilities Current portion of long-term debt $182 Notes payable 126 Accounts payable 3,623...
1. calculate current ratio? 2. calculate the quick ratio of this company? 3. 3. part 3...
1. calculate current ratio?
2. calculate the quick ratio of this company?
3.
3.
part 3 is complete in 2 pictures ..
4. what is compro' debt ratio?
5.
6. what is amount of working capital?
7. what does the working capital of company show?
please please solve all 7 part. I really need it.
thanks
[The following information applies to the questions displayed below.) Shown below are selected data from the balance sheet of Compros, a small electronics store...
Quick assets Inventory and prepaid expenses Other assets Total Assets Current liabilities 10% Bonds payable 896 Preferred stock, $100 par value Common stock, $10 par value Retained earnings Total Liabilities and Stockholders' Equity Dec. 31, 2013 Dec. 31, 2012 $610,000 $562,000 382,000 322,000 4,788,000 4,176,000 $5,780,000 $5,060,000 $634,000 $550,000 1,450,000 1,450,000 480,000 480,000 2,700,000 2,160,000 516,000 420,000 $5,780,000 $5,060,000 For 2013, net sales amount to $12,280,000, net income is $583,600, and preferred stock dividends paid are $39,400. Required Calculate the...
prepaid expenses = $50,000
Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable turnover ratio 3. Net return on total assets 4. Total liabilities to total assets ratio 5. Times interest earned ratio 6. Return on sales 7. Return on equity Sales: $750,000 Cash: $50,000 Inventory: $150,000 Common Stock: $100,000 Accounts Payable: $100,000 Prepaid expenses: $50,000 Long term debt: $200,000 Land and Building: $500,000 Operating Income: $450,000 Taxes: $200,000 Accounts Receivable: $70,000 Retained Earnings: $400,000 Cost of...
(prepaid expenses are $50,000)
Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable turnover ratio 3. Net return on total assets 4. Total liabilities to total assets ratio 5. Times interest earned ratio 6. Return on sales 7. Return on equity Sales: $750,000 Cash: $50,000 Inventory: $150,000 Common Stock: $100,000 Accounts Payable: $100,000 Prepaid expenses: $50,000 Long term debt: $200,000 Land and Building: $500,000 Operating Income: $450,000 Taxes: $200,000 Accounts Receivable: $70,000 Retained Earnings: $400,000 Cost of...
Instructions For 2017 and 2018, calculate current ratio, quick (acid-test) ratio, inventory turnover and days' inventory outstanding (DIO), accounts receivable turnover, days' sales in average receivables or days' sales outstanding (DSO), accounts payable turnover, days' payable outstanding (DPO), and cash conversion cycle (in days). a. Use the cost of goods sold in the formula for accounts payable turnover. b. Use a 365-day year for calculations as needed. c. Use cell references from prior calculations, if applicable. (Always use cell references...
Instructions For 2017 and 2018, calculate current ratio, quick (acid-test) ratio, inventory turnover and days' inventory outstanding (DIO), accounts receivable turnover, days' sales in average receivables or days' sales outstanding (DSO), accounts payable turnover, days' payable outstanding (DPO), and cash conversion cycle (in days). a. Use the cost of goods sold in the formula for accounts payable turnover. b. Use a 365-day year for calculations as needed. c. Use cell references from prior calculations, if applicable. (Always use cell references...
Short-Term Solvency Ratios (Liquidity Rations) 1. Calculate current ratio and quick/liquid/acid test ratio from the following: A Sundry debtors RO 400,000 Stock RO 160,000 A Marketable securities RO 80,000 Cash RO 120,000 * Prepaid expenses RO 40,000 Bill payables RO 80,000 Sundry creditors RO 160,000 A Debentures RO 200,000 Outstanding Expenses RO 160,000 2 Calculate current ratio and anikliidid tact rastin from the following Short-Term Solvency Ratios (Liquidity Rations) 1. Calculate current ratio and quick/liquid/acid test ratio from the following:...
An acid-test ratio, also known as the quick ratio, that is much smaller than the current ratio indicates that: Multiple Choice prepaid expenses represent a small portion of current assets, Inventories represent a small portion of current assets inventories represent a large portion of current assets equipment represents a small portion of current assets
Compute the (1) current ratio and the (2) quick ratio for Nikey, Inc. using the following excerpt from the balance sheet reported in a recent financial statement of Nikey, Inc. At May 31 (in millions) 2020 Current assets Cash and equivalents $6,934 Short-term investments 3,730 Accounts receivable, net 6,044 Inventories 7,807 Deferred income taxes 700 Prepaid expenses and other current assets 3,542 Total current assets $28,757 Current liabilities Current portion of long-term debt $182 Notes payable 126 Accounts payable 3,623...
1. calculate current ratio?
2. calculate the quick ratio of this company?
3.
3.
part 3 is complete in 2 pictures ..
4. what is compro' debt ratio?
5.
6. what is amount of working capital?
7. what does the working capital of company show?
please please solve all 7 part. I really need it.
thanks
[The following information applies to the questions displayed below.) Shown below are selected data from the balance sheet of Compros, a small electronics store...
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