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Calculate quick ratio Assume the following information was derived from the fund financial statements prepared by the city of Tallahassee, Florida for the fiscal year
Calculate quick ratio
Assume the following information was derived from the fund financial statements prepared by the city of Tallahassee, Florida for the fiscal year ended September 30, 2019:
City of Tallahassee | |
---|---|
General Fund | |
Balance Sheet | |
(in thousands) | |
Assets: | |
Cash and cash equivalents | $4,340 |
Due from other governments | 0 |
All other assets | 12,269 |
Total assets | $16,609 |
Liabilities: | |
Total current liabilities | $11,287 |
Fund balance: | |
Nonspendable | 2,625 |
Committed | 0 |
Assigned | 0 |
Unassigned | 2,697 |
Total fund balance | 5,322 |
Total liabilities and fund balance | $16,609 |
City of Tallahassee | |
---|---|
General Fund | |
Statement of Revenues, Expenditures, | |
and Changes in Fund Balance | |
(in thousands) | |
Total revenues | $192,327 |
Total expenditures | 287,828 |
Excess of revenues over (under) expenditures | -95,501 |
Other financing sources (uses): | |
Transfers in | 86,795 |
Transfers out | -37,664 |
Proceeds from sale of capital assets | 753 |
Total other financing sources (uses) | 49,884 |
Net change in fund balance | -45,617 |
Fund balance, October 1, 2019 | 50,939 |
Fund balance, September 30, 2019 | $5,322 |
a) Calculate the city of Tallahassees quick ratio. Round to one decimal Answer
b) Using the rule of thumb suggested in the text, would the level of the quick ratio be considered reasonable, too high, or too low?
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