Question: putting principles to work PURPOSE Te calculate and analyze the current and quick (acid-test) ratios of different businesses. EXERCISE Per und Puma small gift shop,

putting principles to work PURPOSE Te calculate and analyze the current and quick (acid-test) ratios of different businesses. EXERCISE Per und Puma small gift shop, has current assets of $45,000 (including inventory valued at $30,000) and $9,000 in current liabilities. WannaBees, a specialty clothing store, has current assets of S150,000 (including inventory valued at $125,000) and $85,000 in current liabilities. Both businesses have plied for loans Click the "See all calculators" link at bankrate.com and then click on "Small Business to answer the following questions: Read this section if you do not understand the highlighted Calculate the current ratio for cach company. Which company muy w Www The acid test for quick) ratio subtracts the value of the firm's inventory from its total current assets. Because inventory is often difficult to sell, this ration is considered an even more reliable measure of a business's ability to repay loans than the current ratio. Calculate the quick ratio for each business and decide whether you would give either the loan. Why or why not? top putting principles to work PURPOSE Te calculate and analyze the current and quick (acid-test) ratios of different businesses. EXERCISE Per und Puma small gift shop, has current assets of $45,000 (including inventory valued at $30,000) and $9,000 in current liabilities. WannaBees, a specialty clothing store, has current assets of S150,000 (including inventory valued at $125,000) and $85,000 in current liabilities. Both businesses have plied for loans Click the "See all calculators" link at bankrate.com and then click on "Small Business to answer the following questions: Read this section if you do not understand the highlighted Calculate the current ratio for cach company. Which company muy w Www The acid test for quick) ratio subtracts the value of the firm's inventory from its total current assets. Because inventory is often difficult to sell, this ration is considered an even more reliable measure of a business's ability to repay loans than the current ratio. Calculate the quick ratio for each business and decide whether you would give either the loan. Why or why not? top

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