Your firm's current ratio is 3.87. If inventory 1 million dollars and current liabillities are 12 million dollars, what is the question?

johnathanpbICa

johnathanpbICa

Answered question

2022-11-24

Your firm's current ratio is 3.87. If inventory 1 million dollars and current liabillities are 12 million dollars, what is the question?

Answer & Explanation

Hugh Petty

Hugh Petty

Beginner2022-11-25Added 8 answers

Statement showing computation:
Current ratio= current assets/current liabilities
3.87= current assets/12
Current assets = 3.87 12 = $ 46.44 million
Quick assets= current assets-inventory
Quick assets= 46.44-1= 45.44 million
Quick ratio= quick assets/current liabilities
Quick ratio = 45.44 / 12 = 3.79
Quick ratio= 3.79

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