Jefferson Co. has $2 million in total assets and $3 million in sales. The company has...

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Jefferson Co. has $2 million in total assets and $3 million in sales. The company has the following balance sheet: Cash Accounts receivable Inventories Net fixed assets Total assets $ 100,000 200,000 500,000 1,200,000 $2,000,000 Accounts payable Accruals Notes payable Long-term debt Common equity Total liabilities and equity $ 200,000 100,000 200,000 700,000 800,000 $2,000,000 Jefferson wants to improve its inventory turnover to the industry average of 10.0x. The change is not expected to have an effect on sales. If successful, the company would use the freed-up cash from the reduction in inventories and use half of it to reduce notes payable and the other half to reduce common equity. If successful, what will be Jefferson's current ratio? Jefferson Co. has $2 million in total assets and $3 million in sales. The company has the following balance sheet: Cash Accounts receivable Inventories Net fixed assets Total assets $ 100,000 200,000 500,000 1,200,000 $2,000,000 Accounts payable Accruals Notes payable Long-term debt Common equity Total liabilities and equity $ 200,000 100,000 200,000 700,000 800,000 $2,000,000 Jefferson wants to improve its inventory turnover to the industry average of 10.0x. The change is not expected to have an effect on sales. If successful, the company would use the freed-up cash from the reduction in inventories and use half of it to reduce notes payable and the other half to reduce common equity. If successful, what will be Jefferson's current ratio?

Answer rating: 100% (QA)

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