1a. The Nelson Company has $1,274,000 in current assets and $490,000 in current liabilities. Its initial inventory level
Posted: Thu May 26, 2022 6:58 am
1a. The Nelson Company has $1,274,000 in current assets and
$490,000 in current liabilities. Its initial inventory level is
$345,000, 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 2.0? Do not round intermediate calculations. Round your
answer to the nearest dollar.
1b. 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.
$490,000 in current liabilities. Its initial inventory level is
$345,000, 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 2.0? Do not round intermediate calculations. Round your
answer to the nearest dollar.
1b. 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.