The following partial balance sheet is provided for Groome Company: What is the company's quick (acid-test) ratio?
A) 49%
B) 16%
C) 33%
D) Cannot be determined with the information given.

Question

The following partial balance sheet is provided for Groome Company:  What is the company's quick (acid-test) ratio?
A) 49% 
B) 16% 
C) 33% 
D) Cannot be determined with the information given.

Quizplus · Accepted Answer

Recall that total assets equal total liabilities and stockholders' equity.
Debt to assets = Total liabilities ÷ Total assets
Debt to assets = ($9,000 + $12,000 + $20,000) ÷ $125,000 = $41,000 ÷ $125,000 = 33%

The Following Partial Balance Sheet Is Provided for Groome Company