Reference no: EM132139870

You have joined up with two partners, George and Joe, to start a new computer equipment distributorship. Each partner invested $50,000, and you have been elected to actively manage the business. George is not active in the business, but he is really focused on the numbers. He has questioned you intensely on the financial statements you presented at the end of the first year. These statements show current assets of $620,000 (which includes $247,585 in delinquent receivables). Inventory has averaged $75,000 over the course of the year, but has been growing recently and is now up to $95,000 on the year-end balance sheet. The balance sheet also shows the following amounts: accounts payable of $160,000; accrued expenses of $65,000; $35,000 in short-term bank borrowings; a warehouse building with a depreciated cost of $371,000; and a mortgage of $258,000 which is due in one balloon payment on December 31, 2018. The financial statements indicate that stockholders' equity at year-end was $473,000. George is concerned. He tells you he thinks the current ratio is out of line, at least in his mind. You listen to him carefully, take another look at the statements and compute the current ratio. What is it?