Question
Refer to the balance sheet below and calculate: Current Ratio and discuss its significance Quick ratio and interpret results and discuss its significance Inventories $
Refer to the balance sheet below and calculate:
- Current Ratio and discuss its significance
- Quick ratio and interpret results and discuss its significance
Inventories $ 50,000
Trade receivables 50,000
Advance tax 4,000
Cash and cash equivalents 30,000
Trade payables 1,00,000
Short-term borrowings (bank overdraft) 4,000
(10 marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Current Ratio can be computed as Current Assets Current Liabilities Current Assets will be Trade rec...
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Step: 2
Step: 3
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Fundamentals of Corporate Finance
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
3rd edition
1118845897, 978-1118845899
