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Financial Management
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?


  
Total Answers and Comments: 2 Last Update: December 06, 2008     Asked by: Ineedfinhelp 
  
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 Best Rated Answer
Submitted by: joe fagan
 
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?

Current assets/Current Liabilities =1.5
(Current assets minus inventory)/Current Liabilities =1

Thus
Current Liabilities = 2 m
Inventory = 1 m



Above answer was rated as good by the following members:
vivek bond
October 29, 2008 14:43:54   #1  
joe fagan Member Since: October 2008   Contribution: 1    

RE: Financial Management
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?

Current assets/Current Liabilities 1.5
(Current assets minus inventory)/Current Liabilities 1

Thus
Current Liabilities 2 m
Inventory 1 m


 
Is this answer useful? Yes | NoAnswer is useful 1   Answer is not useful 1Overall Rating: -N/A-    
December 05, 2008 23:20:36   #2  
vivek bond Member Since: December 2008   Contribution: 1    

RE: Financial Management
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 .

 
Is this answer useful? Yes | NoAnswer is useful 0   Answer is not useful 1Overall Rating: -1    

 Related Questions

View Question | Asked by : Jayvant

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 
Latest Answer : current asset is $3billion so, current ratio = current assset current liabilities1.5 = 3 / current liabilities  current liabilities 1.5 = 3hence current liabilties is $2 billion Now, quick ratio = quick asset / current liabilities1.0 = quick ...


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