Compute Target’s current ratio and debt to equity ratio in 2016?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter7: Analysis Of Financial Statements
Section: Chapter Questions
Problem 5MC
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Question
Compute Target’s
Expert Solution
Step 1
Current ratio shows a comparison between of current assets to current liabilities that measures whether a firm has sufficient resources to meet its short-term obligations.
Step 2
Target current ratio for 2016 = Current Assets/Current Liabilities
Target current ratio for 2016 = $14.13Mn /$12.622 Mn = 1.12
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