An organization has the following current assets: $100,000 in cash, $50,000 in securities, $20,000 in accounts...
An organization has the following current assets: $100,000 in cash, $50,000 in securities, $20,000 in accounts receivable, and $40,000 in inventory. In terms of current liabilities, the company has $60,000 in accounts payable, $20,000 in current debt, and $20,000 in accrued expenses. What is the current ratio of the company, and what is your interpretation of the current ratio?
Homework Answers
Current ratio = current assets/ current liabilities
= (cash + securities+ receivables+ inventory)/ (payables+ debt + accrued expenses)
= (100000+50000+20000+40000)/ (60000+20000+20000)
=2.1
This implies that the company has $2.1 for every dollar of current liability which is a very healthy sign.
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An organization has the following current assets: $100,000 in
cash, $50,000 in securities, $20,000 in accounts...
MARNI COMPANY Balance Sheet As of December 31 ASSETS Cash 50,000 Accounts receivable 100,000 Inventory 200,000...
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Privett Company Accounts payable $ 30,000 Accounts receivable 35,000 Accrued liabilities 7,000 Cash 25,000 Intangible assets...
Privett Company Accounts payable $ 30,000 Accounts receivable 35,000 Accrued liabilities 7,000 Cash 25,000 Intangible assets 40,000 Inventory 72.000 Long-term investments 100,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 20,000 Property, plant, and equipment 400,000 Prepaid expenses 2,000 Based on the data for Privett Company, what is the amount of quick assets? $168,000 $60,000 $96,000 $61,000
Given the following fact pattern, compute the current ratio: Long-term debt 50,000 Cash 20,000 Accounts Payable...
Given the following fact pattern, compute the current ratio: Long-term debt 50,000 Cash 20,000 Accounts Payable 30,000 Marketable securities 30,000 Inventory 10,000 Taxes 15,000 Land 100,000 Accounts Receivable 30,000
1. Based on the following data, what is the amount of working capital? Accounts payable....................$32,000 Accounts...
1. Based on the following data, what is the amount of working capital? Accounts payable....................$32,000 Accounts receivable....................64,000 Accrued liabilities....................7,000 Cash.........................................20,000 Intangible assets............................40,000 Inventory...............................................72,000 Long-term investments...............................100,000 Long-term liabilities.....................................75,000 Marketable securities.................................35,000 Notes payable (short-term)........................20,000 Property, plant, and equipment.................625,000 Prepaid expenses.........................................2,000 WHAT IS WORKING CAPITAL? a. $162,000 b. $134,000 c. $193,000 d. $62,000 2. Use the following data to determine the total dollar amount of assets to be classified as current assets. Cash..............................................$60,000 Prepaid insurance..........................40,000 Accounts receivable......................50,000 Inventory.........................................70,000 Land held for investment................80,000 Land................................................95,000...
Book value: Marketible securities: 50,000 Non-operating long-term assets: 20,000 Cash: 130,000 Accounts receivable: 200,000 Inventory: 100,0
Book value: Marketible securities: 50,000 Non-operating long-term assets: 20,000 Cash: 130,000 Accounts receivable: 200,000 Inventory: 100,000 Operating long-term assets: 800,000 Accounts payable: 178,000 Accrued taxes: 100,000 Short-term debt: 120,000 Long-term debt: Par value per bond: 1,000 Number of bonds: 550 Total book value, long-term debt: 550,000 Common stock: Par value per share: 10 Number of shares: 35,200 352,000 Total book value, common stock: Market value: Marketible securities: 50,000 Non-operating long-term assets: 25,000 Short-term debt: 120,000 Long-term debt: Market value...
prepaid expenses = $50,000 Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable...
prepaid expenses = $50,000
Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable turnover ratio 3. Net return on total assets 4. Total liabilities to total assets ratio 5. Times interest earned ratio 6. Return on sales 7. Return on equity Sales: $750,000 Cash: $50,000 Inventory: $150,000 Common Stock: $100,000 Accounts Payable: $100,000 Prepaid expenses: $50,000 Long term debt: $200,000 Land and Building: $500,000 Operating Income: $450,000 Taxes: $200,000 Accounts Receivable: $70,000 Retained Earnings: $400,000 Cost of...
(prepaid expenses are $50,000) Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable...
(prepaid expenses are $50,000)
Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable turnover ratio 3. Net return on total assets 4. Total liabilities to total assets ratio 5. Times interest earned ratio 6. Return on sales 7. Return on equity Sales: $750,000 Cash: $50,000 Inventory: $150,000 Common Stock: $100,000 Accounts Payable: $100,000 Prepaid expenses: $50,000 Long term debt: $200,000 Land and Building: $500,000 Operating Income: $450,000 Taxes: $200,000 Accounts Receivable: $70,000 Retained Earnings: $400,000 Cost of...
The Young Company has the following assets and liabilities: ASSETS Cash $35,000 Accounts receivable 15,000 Inventory...
The Young Company has the following assets and liabilities: ASSETS Cash $35,000 Accounts receivable 15,000 Inventory 30,000 Equipment 50,000 LIABILITIES Current portion of long-term debt 10,000 Accounts payable 2,000 Long-term debt 25,000 Determine the quick ratio (rounded to one decimal point). 13.0 4.2 6.7 3.5
Current Year Previous Year Current assets: Cash $387,600 $291,200 Marketable securities 448,800 327,600 Accounts and notes...
Current Year Previous Year Current assets: Cash $387,600 $291,200 Marketable securities 448,800 327,600 Accounts and notes receivable (net) 183,600 109,200 Inventories 475,200 348,900 Prepaid expenses 244,800 223,100 Total current assets $1,740,000 $1,300,000 Current liabilities: Accounts and notes payable (short-term) $348,000 $364,000 Accrued liabilities 252,000 156,000 Total current liabilities $600,000 $520,000 a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
Intro Use the following information to answer the questions: Assets Cash Marketable securities Accounts receivable Inventory...
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MARNI COMPANY Balance Sheet As of December 31 ASSETS Cash 50,000 Accounts receivable 100,000 Inventory 200,000 650,000 Net plant and equipment $1,000,000 Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable 100,000 Accrued expenses 90,000 Long-term debt Common stock 250,000 100,000 Paid-in capital 50,000 Retained earnings 410,000 $1,000,000 Total liabilities and stockholders' equity MARNI COMPANY Income Statement For the year ended December 31 Sales (all on credit) $2,000,000 1,750,000 Cost of goods sold Gross profit 250,000 Sales and administrative expenses 30,000...
Privett Company Accounts payable $ 30,000 Accounts receivable 35,000 Accrued liabilities 7,000 Cash 25,000 Intangible assets 40,000 Inventory 72.000 Long-term investments 100,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 20,000 Property, plant, and equipment 400,000 Prepaid expenses 2,000 Based on the data for Privett Company, what is the amount of quick assets? $168,000 $60,000 $96,000 $61,000
prepaid expenses = $50,000
Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable turnover ratio 3. Net return on total assets 4. Total liabilities to total assets ratio 5. Times interest earned ratio 6. Return on sales 7. Return on equity Sales: $750,000 Cash: $50,000 Inventory: $150,000 Common Stock: $100,000 Accounts Payable: $100,000 Prepaid expenses: $50,000 Long term debt: $200,000 Land and Building: $500,000 Operating Income: $450,000 Taxes: $200,000 Accounts Receivable: $70,000 Retained Earnings: $400,000 Cost of...
(prepaid expenses are $50,000)
Problem 3 Calculate the following information: 1. Quick ratio 2. Accounts receivable turnover ratio 3. Net return on total assets 4. Total liabilities to total assets ratio 5. Times interest earned ratio 6. Return on sales 7. Return on equity Sales: $750,000 Cash: $50,000 Inventory: $150,000 Common Stock: $100,000 Accounts Payable: $100,000 Prepaid expenses: $50,000 Long term debt: $200,000 Land and Building: $500,000 Operating Income: $450,000 Taxes: $200,000 Accounts Receivable: $70,000 Retained Earnings: $400,000 Cost of...
Intro Use the following information to answer the questions: Assets Cash Marketable securities Accounts receivable Inventory Current assets Machines Real estate Fixed assets Total assets 9,000 2,000 6,000 24,000 41,000 34,000 80,000 114,000 155,000 Liabilities and Equity Accounts payable 17,000 Notes payable 6,000 Current liabilities 23,000 Long-term debt 95,000 Total liabilities 118,000 Paid-in capital 20,000 Retained earnings 17,000 Equity 37,000 Total liab. & equity 155,000 - Attempt 1/10 for 10 pts. Part 1 What is the current ratio? 2+ decimals...
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