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Liquidity ratios. Edison, Stagg,

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solution


Question

1. Liquidity ratios. Edison, Stagg, and Thornton have the following financial information at the close of business on July 10;Edison Stagg Thornton;Cash $6,000 $5,000 $4,000;Short-term investments 3,000 2,500 2,000;Accounts receivable 2,000 2,500 3,000;Inventory 1,000 2,500 4,000;Prepaid expenses 800 800 800;Accounts payable 200 200 200;Notes payable: short-term 3,100 3,100 3,100;Accrued payables 300 300 300;Long-term liabilities 3,800 3,800 3,800;a. Compute the current and quick ratios for each of the three companies. (Round calculations to two decimal places.) Which firm is the most liquid? Why?

 

Paper#81271 | Written in 18-Jul-2015

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