Homework answers / question archive / Aggieland Distributing had current assets of $700, Inventory of $300, long-term assets of $1,500, current liabilities of long-term liabilities of $1,000, and shareholder's equity of $800

Aggieland Distributing had current assets of $700, Inventory of $300, long-term assets of $1,500, current liabilities of long-term liabilities of $1,000, and shareholder's equity of $800

Finance

Share With

Aggieland Distributing had current assets of $700, Inventory of $300, long-term assets of $1,500, current liabilities of long-term liabilities of $1,000, and shareholder's equity of $800. The current ratio (rounded) is: 6 a. 1.50 b. 1.75 c. 0.34 d. 2.00 e. 1.33 a. 3. Which of the following could possibly be the quick ratio? 6 1.00 b. 1.80 c. 2.00 d. 2.50 e. 3.50 4. Tommy Joe, owner of Nettles Construction Supply, is reviewing the latest set of financial statements for his company. Tommy Joe is confused by some of the data. Last year the current ratio was 2.50. This year it is down to 1.85. However, the quick ratio was 1.05 last year and up to 1.50 this year. Which of the following best explains how the current ratio can decrease at the same time that the quick ratio increases. 1 a. Tommy Joe is obviously not calculating something correctly b. If inventory decreases, the current ratio can decrease without impacting the quick ratio. c. Inventory has obviously increased. d. If inventory increases, the quick ratio will be more impacted since inventory is subtracted from current assets in the calculation, e. None of the above offer an explanation