Question

SDJ, Inc., has net working capital of $3,640, current liabilities of $5,430, and inventory of $4,290....

SDJ, Inc., has net working capital of $3,640, current liabilities of $5,430, and inventory of $4,290.

  

a. What is the current ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
b. What is the quick ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)
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Homework Answers

Answer #1
Net working capital (NWC) $ 3,640.00
Current liabilities (CL) $ 5,430.00
Inventory $ 4,290.00
Current Asset (CA) ?
NWC = CA - CL
CA = NWC + CL
CA = 3640 + 5430
CA = $ 9,070

Answer for a)

Current ratio = Current Asset / Current liability
= 9070 / 5430
= 1.67

Answer for b)

Quick ratio = (Current Asset - Inventory ) / Current liability
= (9070 - 4290 ) / 5430
= 0.88

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