Question

Current & Quick Ratios:

Ace Industries has current assets equal to $3 million. The company's current ratio is 1.5, and its quick ratio is 1.0. What is the firm's level of current liabilities? What is the firm's kevel of inventories?

Answer #1

Current Asset Ratio = Current Assets / Current Liabilities | ||

1.5 = $ 3 Million / Current Liabilities | ||

Current Liabilities = $ 3 Million / 1.3 | ||

Current Liabilities = $ 2 Million | ||

Answer = Current Liabilities = $ 2 Million | ||

Quick Ratio = Current Assets - Inventory / Current Liabilities | ||

1.0 = $ 3 million - Inventory / $ 2 Million | ||

$ 3 million - Inventory = $ 2 Million X 1 .0 | ||

$ 3 million - Inventory = $ 2 Million | ||

Inventory = $ 3 Million - $ 2 Million | ||

Inventory = $ 1 Million | ||

Answer = Inventory = $ 1 million | ||

Current and Quick Ratios Ace Industries has current assets equal
to $2 million. The company's current ratio is 2.0, and its quick
ratio is 1.5. 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: $
Inventories: $

Ace Industries has current assets equal to $3 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: $
Inventories: $

eBook
Problem 3-9
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without pushing its current ratio below 1.8? Round your answer to
the nearest cent.
$
What will be the firm's quick ratio after Nelson has raised the
maximum amount of...

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in current liabilities. Its initial inventory level is $330,000,
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payable) increase without pushing its current ratio below 2.0? Do
not round intermediate calculations. Round your answer to the
nearest dollar.
What will be the firm's quick ratio after Nelson has raised the
maximum amount...

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The Nelson Company has $1,260,000 in current assets and $450,000
in current liabilities. Its initial inventory level is $300,000,
and it will raise funds as additional notes payable and use them to
increase inventory. How much can Nelson's short-term debt (notes
payable) increase without pushing its current ratio below 2.0? Do
not round intermediate calculations. Round answer to the nearest
dollar.
$
What will be the firm's quick ratio after Nelson has raised the
maximum amount...

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increase inventory. How much can Nelson's short-term debt (notes
payable) increase without pushing its current ratio below 2.2? Do
not round intermediate calculations. Round your answer to the
nearest dollar. $
What will be the firm's quick ratio after Nelson has raised the
maximum...

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