The King Carpet Company has $2,910,000 in cash and a total of $12,780,000 in current assets. The firm's current liabilities equal $5,940,000 such that the firm's current ratio equals 2.2. The company's managers want to reduce the firm's cash holdings down to $1,160,000 by paying $591,000 in cash to expand the firm's truck fleet and using $1,159,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
The King Carpet Company has $2,910,000 in cash and a total of $12,780,000 in current assets. The firm's current liabilities equal $5,940,000 such that the firm's current ratio equals 2.2. The company's managers want to reduce the firm's cash holdings down to $1,160,000 by paying $591,000 in cash to expand the firm's truck fleet and using $1,159,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
Chapter12: Balanced Scorecard And Other Performance Measures
Section: Chapter Questions
Problem 3PA: Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net...
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The King Carpet Company has
$2,910,000
in cash and a total of
$12,780,000
in current assets. The firm's current liabilities equal
$5,940,000
such that the firm's current ratio equals
2.2.
The company's managers want to reduce the firm's cash holdings down to
$1,160,000
by paying
$591,000
in cash to expand the firm's truck fleet and using
$1,159,000
in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
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