Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me anser these Short Term Solvency Questions! Thanks for your expertise!!! 3. Short-term solvency, or liquidity, ratios Aa Aa Halen Inc. has a

image text in transcribed

Please help me anser these Short Term Solvency Questions! Thanks for your expertise!!!

3. Short-term solvency, or liquidity, ratios Aa Aa Halen Inc. has a current ratio of 2.20 times on current liabilities of $800,000. If Halen has $300,000 worth of inventories, what is the firm's quick ratio? O 1.83 times O 2.03 times O 1.53 times O 2.23 times O 1.63 times Halen is considering an expansion that would require a rapid increase in its inventories. The firm will issue short-term debt (notes payable) and use those funds to buy new inventories. Halen's bond contracts stipulate that it must maintain a quick ratio of at least 1.30 times, or else it is in default. How much new inventory can Halen raise before it violates its bond contracts? O $323,077 O $660,000 O $300,000 O $550,000 $454,545 If Halen follows through with this expansion plan, what will its new current ratio be? O 1.79 times O 1.44 times O 1.85 times O 1.90 times O 1.66 times Which current asset is generally considered to be the least liquid? O Inventories Accounts receivable O Cash Most firms borrow money to finance some of their assets, and most will choose to borrow some long-term funds and some short-term funds. Which group of lenders is more likely to care about a firm's liquidity ratios, short-term or long-term lenders? O Short-term lenders O Long-term lenders

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance A Contemporary Application Of Theory To Policy

Authors: David N. Hyman

6th Edition

0030213088, 9780030213083

More Books

Students also viewed these Finance questions

Question

Why do organizations allocate revenues to responsibility centers?

Answered: 1 week ago