help needed with this accounting hw problem?

Under Armour has the following current assets: cash, $63 million; receivables, $60 million; inventory, $54 million; and other current assets, $5 million. Under Armour has the following liabilities: accounts payable, $44 million; current portion of long-term debt, $4 million; and long-term debt, $5 million.

Calculate the current ratio and the acid-test ratio for Under Armour.

I got 182million(current assets)/53million(current liab) = 3.43 (current ratio)

123million(quick assets)/53million(current liabilities) = 2.32 (acid-test ratio)

but the hw website keeps saying this is wrong

1 Answer

  • 1 decade ago
    Favorite Answer

    Your current assets are correct and current liabilities should be 48.

    so current ratio will be 3.792

    Accordingly recalculate acid ratio.

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