Question
Question 2. Jordan Corp has current assets of $150 and current liabilities of $100. a. calculate the current ratio b. the company uses $50 of
Question 2. Jordan Corp has current assets of $150 and current liabilities of $100. a. calculate the current ratio b. the company uses $50 of cash to pay some of its current liabilities. What is the current ratio after this has happened? c. Jordan then (i.e. in addition to the action in (b.) above) sells $25 of its receivables for $25 cash and uses that cash to pay off more of its current liabilities. What is the current ratio after this has happened? d. Jordan then (i.e. in addition to the actions in (b.) and (c.) above) sells $15 of its inventory for $15 cash and uses that cash to pay off more of its current liabilities. What is the current ratio after this has happened? e. Have the above actions increased, decreased, or left unchanged the Days Sales Outstanding (Days Receivables Outstanding)? f. Have the above actions increased, decreased, or left unchanged the Days Inventory On Hand?
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