Question

The following information was taken from the most recent balance sheet of Collectible Calendars, Inc.: Cash & Cash Equivalents $32,000 Short-term Investments 8,000 Current Receivables (Net) 64,000 Current Liabilities 92,000 What is Collectible Calendars quick ratio (round to two decimal places)?

Answer 1

Answer:

1.130

Explanation:

Given:

Cash & Cash Equivalents = $32,000

Short-term Investments = $8,000

Current Receivables (Net) = $64,000

Current Liabilities = $92,000

Now,

The quick ratio is the ratio of the sum of the cash, cash equivalents and net receivables to the current liability of a firm

Therefore,

for the given question

quick ratio = $\frac{\ 32,000 + \ 8,000 + \ 64,000}{\ 92,000}$

or

quick ratio = $\frac{\ 104000}{\ 92,000}$

or

quick ratio = 1.130