Business, 10.07.2019 04:40 angelaencinas90

Ace industries has current assets equal to $9 million. the company's current ratio is 2.0, and its quick ratio is 1.5. do not round intermediate calculations. round your answers to the nearest dollar. what is the firm's level of current liabilities? $ what is the firm's level of inventories?

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Answer from: iikatreii

current liability = 4.5 million

inventory = 2.25 million

Explanation: Current ratio can be defined as a liquidity ratio that is used to analyze whether the company has enough resources to fulfill its short term obligations. It is computed as follows :-

$current\:ratio\:=\frac{current\:assets}{current\:liability}$

$current\:ratio\:=\:\frac{9million}{current\:liabilities}$

therefore,

current liabilities= $\frac{9\million}{2}$

= 4.5 million

Quick ration is more stringent liquidity ratio. It is computed as follows :-

$quick\:ratio\:= \frac{current\:assets\:-\:inventories}{current\;liabilities}$

$1.5\:=\frac{9}{4.5}$

solving this equation we get

inventory = 2.25 million

Answer from: jamarstand

The correct answer is current liabilities is equal to $4.5 million and firm's level of inventory is $2.25 million.

Explanation:

Both current ratio and quick ratio are know as liquidity ratio which tells about the ability of a firm to meet its short term obligations.

The only difference between these two ratio is of taking inventory and prepaid expenses in to account, as while calculating the quick ratio we don't take inventory and prepaid expenses in to account.

Formula for current ratio = $\frac{CURRENT ASSET}{CURRENT LIABILITIES}$

Where the current ratio is 2.0 and current assets is equal to $9 million,

$\frac{\$9\ million}{CURRENT\ LIABILITIES}= 2.0$

CURRENT LIABILITIES = $4.5 MILLION

Formula for quick ratio = $\frac{QUICK ASSETS}{CURRENT LIABILITIES}$

Here current liabilities = $4.5 million,

Quick asset = current assets - inventory

$\frac{\$9\ MILLION - INVENTORY}{\$4.5\ MILLLION}= 1.5$

INVENTORY = $9 MILLION - $6.75 MILLION

INVENTORY = $2.25 MILLION

Answer from: Quest

b $274.07

step-by-step explanation:

you just devide 222 by 0.81

Answer from: Quest

1 all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

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