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Determine how much can nelsons short-term debt

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Reference no: EM132489420

Current and Quick Ratios

Question 1: The Nelson Company has $1,650,000 in current assets and $550,000 in current liabilities. Its initial inventory level is $420,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 1.8? Do not round intermediate calculations. Round your answer to the nearest dollar.

Question 2: What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM132489420

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