BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

Solutions

Chapter
Section
BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
1 views

How is the cash ratio calculated?

a. Current Assets/Current Liabilities

b. Cash Flows from Operating Activities/Current Liabilities

c. (Cash + Marketable Securities)/Current Liabilities

d. (Cash + Marketable Securities + Accounts Receivable)/Current Liabilities

To determine

Concept introduction:

Cash ratio:

Cash ratio is calculated by dividing and cash and cash equivalents by the total current liabilities. The formula for Cash ratio is as follows:

Cash Ratio = Cash and cash equivalents/ Current liabilities

To choose:

The correct option for calculation of Cash ratio.

Explanation

Explanation for correct answer:

Cash ratio is calculated by dividing and cash and cash equivalents by the total current liabilities. Hence the correct option is c.

Explanation for incorrect answers:

a. Cash ratio is calculated by dividing and cash and cash equivalents by the total current liabilities...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Define the stages of decision making.

Fundamentals of Information Systems

What are the basic characteristic of a linear model?

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

What does HMIS stand for?

Precision Machining Technology (MindTap Course List)

How would you balance DFDs?

Systems Analysis and Design (Shelly Cashman Series) (MindTap Course List)

While encrypted files offer greater security than unencrypted files, an operating system may require more time ...

Enhanced Discovering Computers 2017 (Shelly Cashman Series) (MindTap Course List)