(Liquidity Analysis) The King Carpet Company has $2,800,000 in cash and a total of $12,670,000 in current assets. The
Posted: Wed Jul 06, 2022 6:43 pm
(Liquidity Analysis) The King Carpet Company has
$2,800,000
in cash and a total of
$12,670,000
in current assets. The firm's current liabilitiesequal
$5,090,000
such that the firm's current ratio equals
2.5.
The company's managers want to reduce the firm'scash holdings down to
$1,150,000
by paying
$539,000
in cash to expand the firm's truck fleet and using
$1,111,000
in cash to retire a short-term note. If they carry thisplan through, what will happen to the firm'scurrent ratio?
Question content area bottom
Part 1
The new current ratio is
enter your response here.
(Round to one decimal place.)
$2,800,000
in cash and a total of
$12,670,000
in current assets. The firm's current liabilitiesequal
$5,090,000
such that the firm's current ratio equals
2.5.
The company's managers want to reduce the firm'scash holdings down to
$1,150,000
by paying
$539,000
in cash to expand the firm's truck fleet and using
$1,111,000
in cash to retire a short-term note. If they carry thisplan through, what will happen to the firm'scurrent ratio?
Question content area bottom
Part 1
The new current ratio is
enter your response here.
(Round to one decimal place.)