Chen Company has current assets equal to $5,000,000. Of these, $1,000,000 is cash, $2,250,000 is accounts receivable,
Question:
Chen Company has current assets equal to $5,000,000. Of these, $1,000,000 is cash, $2,250,000 is accounts receivable, $500,000 is inventory, and the remainder is marketable securities. Current liabilities total $4,000,000.
Required:
1. Calculate the current ratio.
2. Calculate the quick ratio (acid-test ratio).
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Related Book For
Cornerstones of Managerial Accounting
ISBN: 978-1305103962
6th edition
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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