Evaluate the current and quick ratios

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Reference no: EM13197727

Liquidity ratios. Edison, Stagg, and Thornton have the following financial information at the close of business on July 10:

 

Edison

Stagg

Thornton

Cash

$4,000

$2,500

$1,000

 

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

 








  1. 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?

Reference no: EM13197727

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