A firm has the following balance sheet information: total assets = $100,000; current assets = $30,000; inventories = $10,000; cash = $5,000; total liabilities = $30,000; current liabilities = $15,000; notes payable = $2,000. What are the firm's quick and NWC-to-Total-Assets ratios?
A) 1.00 and .13
B) 1.33 and .13
C) 1.00 and .15
D) 1.33 and .15

Question

Quizplus · Accepted Answer

The quick ratio is calculated as (Current Assets - Inventories) / Current Liabilities = ($30,000 - $10,000) / $15,000 = 1.33. The NWC-to-Total-Assets ratio is (Current Assets - Current Liabilities) / Total Assets = ($30,000 - $15,000) / $100,000 = 0.15.

A Firm Has the Following Balance Sheet Information: Total Assets