Josh Smith has compiled some of his personal financial data in order to determine his liquidity position.
Question:
Account Amount
Cash ............ $3,200
Marketable securities ...... 1,000
Checking account ...... 800
Credit card payables ..... 1,200
Short-term notes payable .... 900
a. Calculate Josh’s liquidity ratio.
b. Several of Josh’s friends have told him that they have liquidity ratios of about 1.8. How would you analyze Josh’s liquidity relative to his friends?
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a b Since Joshs liquidity ratio exceed...View the full answer
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Related Book For 
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
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