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The current ratio of a company is5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $520,000, what is the amount of current liabilities?

I understand that current ration is current assets/current liabilities, and I understand that acid test (quick) ratio is Current assets - Inventories and prepaid/Current liabilities.

I just cannot see the process to take my known 1:1 quick ratio, and my known 5:1 current ratio, knowing that inventories and prepaid items are $520,000 and arrive at my current liabilities.

Posted Date: Jun 22, 2024 12:08 AM

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