EBK CFIN
6th Edition
ISBN: 9781337671743
Author: BESLEY
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 2, Problem 7PROB
Summary Introduction
To determine: Current Liabilities and Inventory
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Credit Card of America (CCA) has a current ratio of 3.5 and a quick ratio of 3.0. If its total current assets equal $73,500, what are CCA’s
(a)current liabilities and
(b)inventory?
Given the following information, compute the current and quick ratios:
Category
Amount
Current Ratio
Quick Ratio
Cash
$100,000
Accounts receivable
$357,000
Inventory
$458,000
Current Liabilities
$498,000
Long term debt
$610,000
Equity
$598,000
Given the following information, compute the current and quick ratios:
Cash
$
120,000
Accounts receivable
389,000
Inventory
495,000
Current liabilities
477,000
Long-term debt
611,000
Equity
567,000
Round your answers to two decimal places.
Current ratio: :1
Quick ratio: :1
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- Based upon the information given below, calculate the following: Current ratio Acid test Accounts receivable turnover ratio Cash ratio Inventory turnover EPS Total asset turnover Debt ratio Debt-to-equity ratio Times interest earned ROI Net profit margin ROE Market price/Book value P/E Average Collection Period BALANCE SHEET ASSETS LIABILITIES & STOCKHOLDERS EQUITY Cash $ 1,500 Accounts payable $12,500 Marketable securities 2,500 Notes payable 12,500 Accounts receivable 15,000 Total…arrow_forwardBased upon the information given below, calculate the following: Current ratio Acid test Accounts receivable turnover ratio Cash ratio Inventory turnover EPS Total asset turnover Debt ratio Debt-to-equity ratio Times interest earned ROI Net profit margin ROE Market price/Book value P/E BALANCE SHEET ASSETS LIABILITIES & STOCKHOLDERS EQUITY Cash $ 1,500 Accounts payable $12,500 Marketable securities 2,500 Notes payable 12,500 Accounts receivable 15,000 Total current liabilities…arrow_forwardA company has current assets of $92,000 (of which $37,000 is inventory and prepaid items) and current liabilities of $37,000. What is the current ratio? What is the acid-test ratio? If the company borrows $17,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be? Current Ratio enter the ratio rounded to 2 decimal places :1 Acid Test Ratio enter the ratio rounded to 2 decimal places :1 New Current Ratio enter the ratio rounded to 2 decimal places :1 New Acid Test Ratio enter the ratio rounded to 2 decimal places :1arrow_forward
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- GRX, Inc. has a current ratio of 4:1. Which of the following transactions wouldnormally increase its current ratio? a. Purchasing inventory on account b. Purchasing machinery for cashc. Selling inventory on accountd. Collecting on account receivablearrow_forwardAce Industries has current assets equal to $4 million. The company's current ratio is 2.0, and its quick ratio is 1.7. What is the firm's level of current liabilities? What is the firm's level of inventories? Do not round intermediate calculations. Round your answers to the nearest dollar. Current Liabilities $ Inventory $arrow_forwardThe Copper Grill has the following current assets: cash, $11 million; receivables, $47 million; inventory, $43 million; and other current assets $3 million. The Copper Grill has the following liabilities: accounts payable, $38 million; current portion of long-term debt, $5 million; and long-term debt, $11 million.Based on these amounts, calculate the current ratio and the acid-test ratio for The Copper Grill. (Round your answers to 2 decimal places.) The Copper Grill Current ratio Acid-test ratioarrow_forward
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