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3 years ago

Nabors Company reported the following current assets and liabilities for December 31 for two recent years:

Business

1 answer:

Fofino [41]3 years ago

6 0

Answer:

Quick Ratio - Current Year = 1.44

Quick Ratio - Previous Year = 1.447826 rounded off to 1.45

The quick ratio of the business has declined as it has less current assets to pay of each $1 of current liability than it had previous year.

Explanation:

The quick ratio or acid test ratio is a financial ratio that is used to assess the liquidity of a business. It measures the amount of most liquid assets that the business has to pay each $1 of current liability of the business. The most liquid assets of a business are all of its current assets excluding inventory. The formula to calculate the quick ratio is,

Quick ratio = (Current Assets - Inventory) / Current Liabilities

Quick Ratio - Current Year = (660 + 1440 + 3300 - 1080) / 3000

Quick Ratio - Current Year = 1.44

Quick Ratio - Previous Year = (920 + 2050 + 1400 - 1040) / 2300

Quick Ratio - Previous Year = 1.447826 rounded off to 1.45

The quick ratio of the business in previous year was approx. 1.45 which means that the business had $1.45 of most liquid current assets to pay each $1 of current liability while this year, it has $1.44 of current assets for each $1 of current liability. This means that the quick ratio of the business has declined as it has less current assets to pay of each $1 of current liability than it had previous year.

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3 years ago

Read 2 more answers

A stock has a beta of 1.12 and an expected return of 10.8 percent. A risk-free asset currently earns 2.7 percent. a. What is the

love history [14]

Answer:

6.75%

Explanation:

Data provided in the question:

Beta of the stock = 1.12

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Now,

Since it is equally invested in two assets

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Expected return on a portfolio = ∑(Weight × Return)

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