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torisob [31]
3 years ago
10

North Bank is analyzing Belle Corp.'s financial statements for a possible extension of credit. Belle's quick ratio is significan

tly better than the industry average. Which one of the following factors should North consider as a possible limitation of using this ratio when evaluating Belle's creditworthiness?
A. Fluctuating market prices of short-term investments may adversely affect the ratio.
B. Increasing market prices for Belle's inventory may adversely affect the ratio.
C. Belle may need to sell its available-for-sale investments to meet its current obligations.
D. Belle may need to liquidate its inventory to meet its long-term obligations.
Business
1 answer:
Arlecino [84]3 years ago
4 0

Answer:

A) Fluctuating market prices of short-term investments may adversely affect the ratio.

Explanation:

The quick ratio (or acid test) measures a company's ability to pay short term liabilities using its liquid assets. usually the best quick ratio is 1, because it means that your liquid current assets cover completely your current liabilities.

There are two formulas to calculate the quick ratio:

  • quick ratio = (cash + marketable securities + accounts receivables) / current liabilities
  • quick ratio = (current assets - inventory - prepaid expenses) / current liabilities

The quick ratio includes the value of short term investments, and any fluctuation in their price may affect the ratio.

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Answer:

D. the combinations of output and the interest rate where the goods market is in equilibrium.

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3 years ago
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Answer:

The correct answer is True.

Explanation:

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With word of mouth advertising, you can surely get your business to reach different cities; but not at the speed that is required to recover the investment invested.

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We are sure you have heard the following quotes; <em>"The best publicity is what satisfied customers do"</em> by Philip Kotler, and "What helps people helps business" by Leo Burnett

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2 years ago
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skad [1K]

Answer:

a) Manufacturing overhead applied to Work in Process for the month was $70,000

Explanation:

Data provided in the question

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