Sam’s MARKET Balance Sheet As of December 31, 2015 Short term assets 700,000 Deb
ID: 2791092 • Letter: S
Question
Sam’s MARKET
Balance Sheet As of December 31, 2015
Short term assets 700,000
Debt 500,000
Long term assets 1,300,000
Preferred Equity 400,000
Common Equity 1,100.000
Total assets 2,000,000
2,000000
=========
PEPITO’S FISH MARKET Income Statement For the year Ending December 31,2017
Sales
6,000,000
Cost of goods sold
3,000,000
Operating Income
3,000,000
Expenses
2,000,000
Earnings before Interest and Taxes
1,000,000
Interest expense
50,000
Earnings before Taxes
1,950,000
taxes
500,000
Net Income
1450000
Please calculate
quick acid ratio or Acid test
Short term assets 700,000
Debt 500,000
Long term assets 1,300,000
Preferred Equity 400,000
Common Equity 1,100.000
Total assets 2,000,000
2,000000
=========
Explanation / Answer
Quick acid ratio shows the ability of the company to pay its current liabilities with quick assets.
Quick acid ratio=Short term assets/Debt=700000/500000=1.4
Thank you.
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