Question
The King Carpet Company has $2,960,000 in cash and a total of $12,820,000 in current assets. The firm's current liabilities equal $6,130,000 such that the
The King Carpet Company has $2,960,000 in cash and a total of $12,820,000 in current assets. The firm's current liabilities equal $6,130,000 such that the firm's current ratio equals 2.1. The company's managers want to reduce the firm's cash holdings down to $1,000,000 by paying $509,000 in cash to expand the firm's truck fleet and using $1,451,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
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Part 1
The new current ratio is ________
enter your response here.
(Round to one decimal place.)
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