Chapter 15, Problem 11CR

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

Write the formulas for the current ratio and inventory turnover. (15-7)

To determine

The formula to calculate current ratio and inventory turnover.

Explanation

The formula to compute current ratio is:

For example:

Consider that current assets are

Compute the current ratio:

Substitute

Hence, current ratio is

Sect-15.I P-1TIESect-15.I P-2TIESect-15.I P-3TIESect-15.I P-1RESect-15.I P-2RESect-15.I P-3RESect-15.I P-4RESect-15.I P-5RESect-15.I P-6RESect-15.I P-7RE

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