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GeekInterview.com > Interview Questions > Accounting > Fixed Assets
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Question: Financial Management
Answer: A company has current assets of $3 million. The company's current ratio is 1.5 and it's quick ratio is 1.0. What amount of current liabilities does the company have? What amount of the company's current assets is represented by inventory? |
| December 12, 2008 23:20:36 |
#2 |
| vivek bond |
Member Since: December 2008 Total Comments: 1 |
RE: Financial Management
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current asset is $3billion
so, current ratio = current assset current liabilities
1.5 = 3 / current liabilities
current liabilities 1.5 = 3
hence current liabilties is $2 billion
Now, quick ratio = quick asset / current liabilities
1.0 = quick asset / 2
quick asset is 2
now.......... quick asset = current asset - stock
2 = 3 - stock
stock = 3 - 2 = 1
so........stock(inventory) is $ 1 billion . |
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