Problem 7-9 Current and Quick Ratios

The Nelson Company has $1,045,000 in current assets and $475,000 in current liabilities. Its initial inventory level is $237,500, and it will raise funds as additional notes payable and use them to increase inventory.

How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.3? ____________ Round your answer to the nearest cent.

What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places. ____________