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How much can nelsons short-term debt notes payable increase

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Current and Quick Ratios

The Nelson Company has $1,155,000 in current assets and $525,000 in current liabilities. Its initial inventory level is $367,500, 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 1.5? Round your answer to the nearest cent. $ ___________

What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places.______________

Current Ratio  = Current Asset / Current Liabilities

Reference no: EM13966332

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