Determine inventories of a firm, Finance Basics

A firm's current ratio is 1.5, and its quick ratio is 1.0. If its current liabilities are $10,000, what are its inventories?  


Current Ratio




(Current Assets/Current Liabilties)



Quick Ratio




Current Liabilities


 mce_markernbsp;                     10,000.00


Current Assets


 mce_markernbsp;                     15,000.00


(a x c)



As quick ratio,


(Current Assets - Stock)/Current Liabilties) = 1.0


($15,000 - Stock)/$10,000 = 1


$15000 - Stock = $10,000


Stock = $5,000




Posted Date: 7/23/2012 2:03:25 AM | Location : United States

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