Question: John Baker has sneaker store that operates in Lower Manhattan. Currently the store has a current inventory of $2,500, 000. Current Assets of $ 6,

John Baker has sneaker store that operates in Lower Manhattan. Currently the store has a current inventory of $2,500, 000. Current Assets of $ 6, 500, 000 and Current Liabilities of $2,000, 000.

Using the figures provided, compute the Current ratio and the Quick Acid Ratio.

Current ratio= Current Assets Current Liabilities

Quick Acid Ratio= (Current Assets- inventory) Current Liabilities

Explain how these financial these analyses are used to measure financial performance.

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