Current Liabilities- $360,000.00 Quick Ratio- 2.65 Current Ratio- 4.75 Cash- $55

Question

Current Liabilities- $360,000.00

Quick Ratio- 2.65

Current Ratio- 4.75

Cash- $550,000.00

# of times inventory is sold and re-stocked(inventory T/O ratio- 7.25

1) The total current asset amount is?

a-1,710,000

b- 550,000

c- 910,000

d- 190,000

2) The inventory amount is

a- 954,000

b- 756,000

c- 675,000

d- 549,000

3) What would be the accounts receivale amount?

a- 756,000

b- 954,000

c- 1,160,000

d- 404,000

4) Calculate the total annual sales of the company

a- 550,000

b- 1,710,000

c- 5,481,000

d- 435,000

5) Find the Days Sales Outstanding:

a- 26.9

b- 35.5

c- 10.0

d- 40.0

6) Which of the following will have its value dependent on the value of another underlying asset?

a- A stock

b- A Bond

c- Derivative

d- none of the above

Explanation / Answer

1. Current Asset Ratio= Current Aesst/ Current Liabilities

4.75=Current assets/360000

Current Assets=360000*4.75=1710000

The correct answer is a.

2. Quick Ratio=Cash in Hand+Inventory/Current Liabilities

2.65=550000+accounts receivable/360000

Inventory=1710000-404000-550000

b. 756000

3. accounts Receivable= Total Assets-cash-inventory

=1710000-550000-756000=404000

d. 404000

6. d derivative

A derivative is a security in which the price of the security is dependent on underlying assets.

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