SDJ, Inc., has net working capital of $2,135, current liabilities of $5,320, and inventory of $2,470. SDJ, Inc., has net working capital of $2,135, current liabilities of $5,320, and inventory of $2,470.

a. What is the current ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

b. What is the quick ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

Question

Business

Virginia

1 April, 16:52

SDJ, Inc., has net working capital of $2,135, current liabilities of $5,320, and inventory of $2,470. SDJ, Inc., has net working capital of $2,135, current liabilities of $5,320, and inventory of $2,470.

a. What is the current ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

b. What is the quick ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e. g., 32.16.)

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Answers (1)

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Mcclure · Answer 1

1)

Net working capital = Current assets - current liabilities

2,135 = Current assets - 5,320

Current assets = 7,455

Current ratio = Current assets / current liabilities

Current ratio = 7,455 / 5,320

Current ratio = 1.40

2)

Quick ratio = (Current assets - inventory) / current liabilities

Quick ratio = (7,455 - 2,470) / 5,320

Quick ratio = 0.94