Question

Liquidity Ratios You have the following information on Marco's Polo Shop: total liabilities and equity = $212 million; current liabilities = $52 million, inventory = $67 million, and quick ratio = 2.5 times. Using this information, what is the balance for fixed assets on Marco Polo's balance sheet?

Answer 1

Answer:

Fixed assets = $15,000,000

Explanation:

Quick ratio = (Current assets - Inventory) ÷ Current liabilities

2.5 = (Current assets - $67,000,000) ÷ $52,000,000

$130,000,000 = Current assets - $67,000,000

Current assets = $197,000,000

Total assets = Total liabilities and equity

Total assets = Current assets + Fixed assets

$212,000,000 = $197,000,000 + Fixed assets

Fixed assets = $15,000,000