All categories

3 years ago

Question 26

Business

1 answer:

irakobra [83]3 years ago

4 0

Answer:

3.50 and 0.90

Explanation:

Calculation for the current ratio and acid-test ratio for the boutique

Calculation of CURRENT RATIO

First step is to calculate the current assets and current liabilities

CURRENT ASSETS

Cash 52,000

Short-term investment 12,000

Accounts receivable 54,000

Inventory 325,000

Prepaid expenses 17,500

Total current assets $ 460,500

CURRENT LIABILITIES

Accounts payable$ 106,500

Other current payables $ 25,000

Total current liabilities $ 131,500

Using this formula

Current ratio=Current assets/Current Liabilities

Let plug in the formula

Current ratio=460,500/131,500

Current ratio=3.50

Therefore the Current ratio will be 3.50

Calculation for CURRENT ACID -TEST RATIO

Using this formula

Current acid-test ratio=Quick assets/Current Liabilities

Let plug in the formula

Current acid-test ratio=460,500-(325,000+17,500)/131,500

Current acid-test ratio=118,000/131,500

Current acid-test ratio=0.90

Therefore the Current acid-test ratio will be 0.90

You might be interested in

Sales mix is

Allushta [10]

Answer:

<u>a. the relative distribution of sales among the products sold by a company.</u>

Explanation:

A sale mix is a relative part or ratio of the business products are sold and as the companies products have different degrees of productivity they are also applicable to services.

It thus can be expressed as the ratio of the products with each and every product compared to the overall volume of the product.

Thus, if a company tries to get a new product which has a lower profit, then sells it very aggressively it will make a low profit where the total sales will be increased.

Similarly, if a company selects to develop a low-profit line and push sales of a higher profit from the product line, then the total profits will then increase even as the total sales tend to decline.

6 0

3 years ago

What is the relationship between changes in the money supply and changes in the reserve requirement

EastWind [94]

Answer:

Reserve requirements have an indirect relationship with the money supply

Explanation:

Reserve requirements are a portion of customer deposits a bank is supposed to keep in its custody at all times. The federal reserve gives guidance on the proposition of reserve requirement that a bank should hold. Reserve requirement is usually a percentage of the deposits. Banks cannot loan out their reserves.

Reserve requirements have an inverse relationship with the money supply in the economy. If the reserve requirement is high, banks will have a lower proposition of customer deposits to loan out. When reserve requirement is low, banks will have a bigger proposition of deposits to loan out, thereby increasing the money supply in the economy.

3 0

4 years ago

easynotrcards Under a fixed exchange rate regime, if the domestic currency is initially undervalued, that is, above par, the cen

Alina [70]

Answer:

D) foreign; domestic

Explanation:

The central Bank can improve the domestic currency by using the reserves. If the domestic currency undervalued the central bank may intervene to sell the Foreign currency and purchase the domestic currency, which will increase the demand of domestic currency and increase the supply of foreign currency in the market which will improve the value of domestic currency and undervalue the foreign currency.

7 0

3 years ago

Read 2 more answers

Zoo Inc. is preparing its cash budget for March. The budgeted beginning cash balance is $21,000. Budgeted cash receipts total $1

sveticcg [70]

Answer: Please see answer below in the explanation column

Explanation: Zoo Inc company's cash budget for November indicsating borrowing is given by

Cash balance, beginning $ 21,000

Add cash receipts 117,000

Total cash available--(Cash balance + cash receipts)= $138 ,000

Less cash disbursements $ 86,000

Excess (deficiency) of cash available over disbursements (The beginning balance plus the expected cash receipts less the expected cash disbursement) ($ 21,000+$117,000)--$86,000 = $52,000

Financing ($65,000 − $52,000)= $13,000

Borrowings ----$100,000

Cash balance, ending ----$100,000+ $52,000 = $152,000(Burrowings + Excess cash available over disbursements)

6 0

3 years ago

Juggernaut Satellite Corporation earned $19.6 million for the fiscal year ending yesterday. The firm also paid out 30 percent of

grandymaker [24]

Answer:

The required rate of return on the stock is 12.55%

Explanation:

According to the given data we have the following:

The Company is distributing 30% of its earnings as dividends

Therefore, company is retaining = 100-30 = 70% of its earnings

Growth = Retention ratio * ROE = 0.7*0.14 = 9.8%

Earning = 19.6 million

hence, Paid as dividends = 19.6*0.3 = $5.88 million

The Number of shares outstanding = 2.8 million

hence, Dividend per share = Total dividends / number of shares outstanding = 5.88/2.8 = $2.1

Current stock price = $84

Therefore, to calculate the required rate of return on the stock we would have to use the following formula:

Price of stock = Current dividend*(1+growth)/(r-growth), where r is required rate of return

84 = 2.1*(1.098)/(r-0.098)

40 = 1.098/(r-0.098)

r - 0.098 = 0.02745

r = 0.02745+0.098 = 0.12545

The required rate of return on the stock is 12.55%

4 0

3 years ago