Corporation A and B both have a current ratio of 2:1. Corporation A has Cash of...
-
Corporation A and B both have a current ratio of 2:1. Corporation A has Cash of $20,000, Inventories of $10,000. Corporation B has Cash of $2,000 and Inventories of $28,000. Which of the following statements is true?
-
Both companies have current liabilities of $10,000
-
Corporation A is more liquid than Corporation B
-
Both companies have the same liquidity position
-
None of the above
Homework Answers
Correct answer----Corporation A is more liquid than Corporation B.
.
Inventory is not considered as a liquid asset. The value of liquid assets decides which company is more liquid.
Company A has high value of liquid asset (which is cash) in comparison to Company B.
Current liabilities of both companies are $15000
| Company A | Company B | |
| Current ratio | 2: 1 | 2: 1 |
| Total Current assets | $ 30,000.00 | $ 30,000.00 |
| Current liabilities (total current assets/2) | $ 15,000.00 | $ 15,000.00 |
Add Answer to:
Corporation A and B both have a current ratio of 2:1.
Corporation A has Cash of...
A liquid asset can be converted to cash quickly without significantly impacting the asset's value.
A liquid asset can be converted to cash quickly without significantly impacting the asset's value. Which of the following asset classes is generally considered to be the most liquid? Cash Accounts receivable Inventories The most recent data from the annual balance sheets of N&B Equipment Company and Jing Foodstuffs Corporation are as follows: N&B Equipment Company's current ratio is _______ , and its quick ratio is _______ ; Jing Foodstuffs Corporation's current ratio is_______ , and its quick ratio is _______ . Note: Round your values...
Which of the following statements is true? A. The use of the current ratio does not...
Which of the following statements is true? A. The use of the current ratio does not make it possible to compare companies of different sizes. B. A current ratio of 1.2 to 1 indicates that a company’s current assets are less than its current liabilities. C. All companies, regardless of size, should have a current ratio of at least 2:1. D. The current ratio is a more dependable indicator of liquidity than working capital.
15. Company A has a cash ratio of 0.25 and Company B has a cash ratio...
15. Company A has a cash ratio of 0.25 and Company B has a cash ratio of 0.72. Also, company A's stock is traded at an average daily volume of 100 million shares and with a bid-ask spread of 1 cent. Company B's stock is traded at an average daily volume of 5 million shares and with a bid-ask spread of 5 cents. Which of the following is most likely to be true? A) Company A is stock is more...
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...
In July 2007, Apple had cash of $7.08 billion, current assets of $18.74 billion, current liabilities...
In July 2007, Apple had cash of $7.08 billion, current assets of $18.74 billion, current liabilities of $6.98 billion, and inventories of $0.21 billion. (a) What was Apple's current ratio? Answer (b) What was Apple's quick ration? Answer (c) In July 2007, Dell had a quick ratio of 1.29 and a current ratio of 1.35. What can you say about the asset liquidity of Apple relative to Dell? 1. Apple has significantly more debt than Dell. 2. Dell has significantly...
Liquidity ratios
1. Liquidity ratiosA liquid asset can be converted quickly to cash with little sacrifice in its value.Which of the following asset classes is generally considered to be the least liquid?Accounts receivableInventoriesCashPoints:1 / 1Close ExplanationExplanation:In the event of a liquidation, inventories tend to recover the least amount of their stated value. Cash will not lose value, and accounts receivable are likely to retain their value if there are no bad debts. That is why the quick ratio adjusts current assets by...
2. Christopher construction, Inc. has current assets of $20,000 and current liabilities of $10,000. If we...
2. Christopher construction, Inc. has current assets of $20,000 and current liabilities of $10,000. If we assume that each transaction is independent, what is the effect of each of the following transaction on Christopher Construction Inc.’s current ratio? Compute the current ratio for each case. a) $2000 of accounts payable are paid off with cash. b) Inventories of $5000 are purchased on credit. c) Additional common stock is sold for $4000 cash. d) A long-term debt of $2,000 is obtained,...
2. Christopher construction, Inc. has current assets of $20,000 and current liabilities of $10,000. If we...
2. Christopher construction, Inc. has current assets of $20,000 and current liabilities of $10,000. If we assume that each transaction is independent, what is the effect of each of the following transaction on Christopher Construction Inc.’s current ratio? Compute the current ratio for each case. a) $2000 of accounts payable are paid off with cash. b) Inventories of $5000 are purchased on credit. c) Additional common stock is sold for $4000 cash. d) A long-term debt of $2,000 is obtained,...
plz solve all the questions of Selected financial information for ACE Corporation has been provided: Current...
plz solve all the questions
of Selected financial information for ACE Corporation has been provided: Current assets $100,000 Property, plant, and equipment 250,000 Current liabilities 50,000 Non-current liabilities 200,000 Common shares 10,000 ACE Corporation's current ratio is Select one: O 2.0:1 O none of the above O 0.5:1 O .04:1 0 $50,000 stion 12 The current ratio is a vet ered ed out of Select one: O none of the above on O profitability ratio O both a and c...
Liquidity Ratios
Which of the following statements are true? Check all that apply.Jing Foodstuffs Corporation has a better ability to meet its short-term liabilities than N&B Equipment Company.If a company’s current liabilities are increasing faster than its current assets, the company’s liquidity position is weakening.An increase in the quick ratio over time usually means that the company’s liquidity position is improving and that the company is managing its short-term assets well.Compared to N&B Equipment Company, Jing Foodstuffs Corporation has less liquidity and a lower...
A liquid asset can be converted to cash quickly without significantly impacting the asset's value. Which of the following asset classes is generally considered to be the most liquid? Cash Accounts receivable Inventories The most recent data from the annual balance sheets of N&B Equipment Company and Jing Foodstuffs Corporation are as follows: N&B Equipment Company's current ratio is _______ , and its quick ratio is _______ ; Jing Foodstuffs Corporation's current ratio is_______ , and its quick ratio is _______ . Note: Round your values...
15. Company A has a cash ratio of 0.25 and Company B has a cash ratio of 0.72. Also, company A's stock is traded at an average daily volume of 100 million shares and with a bid-ask spread of 1 cent. Company B's stock is traded at an average daily volume of 5 million shares and with a bid-ask spread of 5 cents. Which of the following is most likely to be true? A) Company A is stock is more...
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...
plz solve all the questions
of Selected financial information for ACE Corporation has been provided: Current assets $100,000 Property, plant, and equipment 250,000 Current liabilities 50,000 Non-current liabilities 200,000 Common shares 10,000 ACE Corporation's current ratio is Select one: O 2.0:1 O none of the above O 0.5:1 O .04:1 0 $50,000 stion 12 The current ratio is a vet ered ed out of Select one: O none of the above on O profitability ratio O both a and c...
Most questions answered within 3 hours.
-
Rice Products in Bangladesh
Business behavior is derived in large part from the basic cultural
environment...
asked 37 minutes ago -
The following base sequence is found for a mRNA fragment from
wild-type E. coli: 5'- UAUCAGUAGAUAAUGUAACC-3'...
asked 1 hour ago -
For this exercise, round all regression parameters to three
decimal places.
One of the two tables...
asked 1 hour ago -
What is the 5% level of significance for mean = 3.60, standard
deviation = 0.94, and...
asked 1 hour ago -
Prior to beginning work on this discussion, please read the
article by Hayley Peterson, 15 Companies...
asked 1 hour ago -
Which pair of aqueous solutions, when mixed, will form a
precipitate?
A) NaNO3 and AgC2H3O2
B)...
asked 2 hours ago -
1-Write an algorithm to get two numbers from the user (as
inputs) and calculate the sum...
asked 5 hours ago -
Define white-collar crime. What is the difference between
offender and offense-based definitions of white-collar crime? What...
asked 6 hours ago -
Consider a reaction which is 1st order with respect to A and 1st
order with respect...
asked 6 hours ago -
c++
The length of the hypotenuse of a right-angled triangle is the
square root of the...
asked 6 hours ago -
When a metal rod is heated, not only its resistance but also its
length and cross‐sectional...
asked 6 hours ago -
write a c++ program that computes the L^1 - Norm of a given
vector (L^1 norm...
asked 6 hours ago