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Calculating Liquidity Ratios The balance sheets for Red Oak Inc. and Birch Co. follow. Red Oak Birch Current assets Cash $13,000 $10,000 Short-term investments 3,000
Calculating Liquidity Ratios
The balance sheets for Red Oak Inc. and Birch Co. follow.
| Red Oak | Birch | |
|---|---|---|
| Current assets | ||
| Cash | $13,000 | $10,000 |
| Short-term investments | 3,000 | - |
| Accounts receivable | 65,000 | 18,000 |
| Inventory | 17,000 | 5,000 |
| Other | 5,000 | 6,000 |
| Noncurrent assets | 285,000 | 317,000 |
| Total assets | $388,000 | $356,000 |
| Current liabilities | $78,000 | $30,000 |
| Long-term liabilities | 30,000 | 230,000 |
| Stockholders' equity | 280,000 | 96,000 |
| Total liabilities and stockholders' equity | $388,000 | $356,000 |
Required Calculate the following ratios and comment on the results.
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Eoc Only Davis Managerial Accounting
Authors: Charles E. Davis, Elizabeth Davis
2nd Edition
111883464X, 978-1118834640
