The following information pertains to Marigold Corp. Assume that all balance she
ID: 2338817 • Letter: T
Question
The following information pertains to Marigold Corp. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. rse Assets tor Cash and short-term investments Accounts receivable (net) Inventory Property, plant and equipment Total Assets $55000 37000 35000 p- $362000 Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Stockholders' equity-common Total Liabilities and Stockholders' Equity $78000 82000 $$ 362000 Income Statement Sales revenue Cost of goods sold Gross profit Operating expenses Net income $79000 29000 $ 14000 6000 $18 Number of shares of common stock Market price of common stock Dividends per share on common stock Cash provided by operations $46000 What is the current ratio for this company? o 1 1.63Explanation / Answer
Correct Answer ---1.63
Calculations
Current Ratio
Numerator
Current Assets
=
$ 127,000.00
=
1.63
Denominator
Current Liabilities
$ 78,000.00
Current assets
Cash and short term investments
$ 55,000.00
Accounts receivables
$ 37,000.00
Inventories
$ 35,000.00
Total Current Assets
$ 127,000.00
Current ratio tells about the liquidity position of a company. Current ratio also tells about a company’s ability to pay debts.
Current Ratio
Numerator
Current Assets
=
$ 127,000.00
=
1.63
Denominator
Current Liabilities
$ 78,000.00
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