Question

SDJ, Inc., has net working capital of $3,320, current liabilities of $4,550, and inventory of $4,600 a. What is the current ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) b. What is the quick ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) a. Current ratio times b. Quick ratio times

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Answer #1

a)

Net working capital = current assets - current liabilities

3,320 = current assets - 4,550

Current assets = 7,870

Current ratio = Current assets / current liabilities

Current ratio = 7,870 / 4,550

Current ratio = 1.73

b)

Quick ratio = (Current assets - inventories) / current liabilities

Quick ratio = (7,870 - 4,600) / 4,550

Quick ratio = 0.72

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