Anonymous
Anonymous asked in Business & FinanceOther - Business & Finance · 1 decade ago

Accounting help!!! I am really confused can you PLEASE HELP ME!!!!!!?

The following items are reported on a company's balance sheet:

Cash $190,000

Temporary investments 150,000

Accounts receivable (net) 260,000

Inventory 300,000

Accounts payable 600,000

Determine (a) the current ratio and (b) the quick ratio. Round to one decimal place.

Current ratio= ?

Quick ratio=?

Answes=

1 Answer

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  • Anonymous
    1 decade ago
    Favorite Answer

    The current ratio is [ ($190,000 + $150,000 + $260,000 + $300,000) / $600,000 ] = 1.5

    ------------------------

    For the quick ratio, inventory is omitted/excluded because it can take a while to sell the inventory and collect the money for it. The quick ratio is:

    [ ($190,000 + $150,000 + $260,000) / $600,000 ] = 1.0

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