Given the following information, compute the current and quick ratios: Cash$150,000Accounts receivable 308,000Inventory 485,000Current liabilities 500,000Long-term debt 583,000Equity 597,000 Round your answers to two decimal places.Current ratio: :1Quick ratio: :1

Answered: compute the current and quick ratios

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 30BEB: Klynveld Companys balance sheet shows total liabilities of 94,000,000, total stockholders equity of...

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Given the following information, compute the current and quick ratios:

Cash	$	150,000
Accounts receivable		308,000
Inventory		485,000
Current liabilities		500,000
Long-term debt		583,000
Equity		597,000

Round your answers to two decimal places.

Current ratio: :1

Quick ratio: :1

Expert Solution

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Liquidity ratio is the ability of the business to pay the amount due as and when they occurs. These are usually short term in nature. Liquidity ratio includes quick ratio and current ratio.

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