Questions: Calculate the acid test ratio. Note: Do NOT enter your answer as a percentage (i.e., do not move the decimal two places to the right). Enter it as a proportion rounded to the nearest hundredth.

Calculate the acid test ratio. Note: Do NOT enter your answer as a percentage (i.e., do not move the decimal two places to the right). Enter it as a proportion rounded to the nearest hundredth.
Transcript text: Calculate the acid test ratio. Note: Do NOT enter your answer as a percentage (i.e., do not move the decimal two places to the right). Enter it as a proportion rounded to the nearest hundredth.
failed

Solution

failed
failed

Solution Steps

To calculate the acid test ratio, we need to determine the company's ability to pay off its current liabilities without relying on the sale of inventory. The acid test ratio is calculated by dividing the sum of cash, cash equivalents, marketable securities, and accounts receivable by the total current liabilities. In this case, we will use the given financial data to compute the acid test ratio for the years 2023 and 2022.

Step 1: Calculate Quick Assets for 2023 and 2022

To find the quick assets, we subtract inventory from current assets for both years: \[ \text{Quick Assets}_{2023} = \text{Current Assets}_{2023} - \text{Inventory}_{2023} = 61000 - 13500 = 47500 \] \[ \text{Quick Assets}_{2022} = \text{Current Assets}_{2022} - \text{Inventory}_{2022} = 45500 - 9000 = 36500 \]

Step 2: Calculate Acid Test Ratio for 2023 and 2022

The acid test ratio is calculated by dividing quick assets by current liabilities: \[ \text{Acid Test Ratio}_{2023} = \frac{\text{Quick Assets}_{2023}}{\text{Current Liabilities}_{2023}} = \frac{47500}{20000} = 2.375 \approx 2.38 \] \[ \text{Acid Test Ratio}_{2022} = \frac{\text{Quick Assets}_{2022}}{\text{Current Liabilities}_{2022}} = \frac{36500}{11000} = 3.3181 \approx 3.32 \]

Final Answer

The acid test ratios are: \[ \text{Acid Test Ratio}_{2023} = 2.38 \] \[ \text{Acid Test Ratio}_{2022} = 3.32 \] Thus, the final answers are: \[ \boxed{\text{Acid Test Ratio}_{2023} = 2.38} \] \[ \boxed{\text{Acid Test Ratio}_{2022} = 3.32} \]

Was this solution helpful?
failed
Unhelpful
failed
Helpful

Questions asked by other users

failedAnswered
Select the correct answer What would most likely be the effect of changing George S. Kaufman's The Still Alarm so that the characters reacted in a panic rather than in a calm manner? A. The play would be significantly shorter. B. The characters would be more likeable C. The play would not have a comic tone. D. The play would include more dialogue.
failedAnswered
Which feature of today's system of justice is most important in establishing social order, according to Foucault's theory? Select an Answer A. punishment B. surveillance C. crime prevention D. mass incarceration
failedAnswered
A client with heart failure is learning to reduce salt in the diet. When will be the best time for the nurse to address this topic? Answers: A - D A At bedtime, while the client is relaxed B At lunchtime, while the nurse is preparing the food tray C Three hours after lunch when the client wakes up from a nap
failedAnswered
a. Give the scale of the y-axis. b. Give the number of sales on day 6. c. Which days were immediately followed by an increase in sales? Enter your answer as a comma separated list. d. Which days were immediately followed by a decrease in sales? Enter your answer as a comma separated list. e. What was the least number of t-shirts sold?
failedAnswered
Problem: Momentum is mass times velocity. Suppose the momentum of a 495 g object is measured to be 286. kg*m/s. Calculate the object's velocity. Be sure your answer has a unit symbol and the correct number of significant digits.