Peak Performance Sporting Goods Company Has Just Applied for a Bank

question 307

Multiple Choice

Peak Performance Sporting Goods Company has just applied for a bank loan in order to expand the business.Using the most recent Balance Sheet data provided by the company owner,you calculate that the company's current ratio is 2.5.In your presentation to the company boss,you remark:

• A)Peak Performance is currently having trouble meeting its short-term obligations.
• B)Peak Performance has $2.50 that it owes each month,for every $1.00 of cash that it is generating.
• C)Peak Performance has $2.50 of current assets for each $1.00 of currently liabilities.
• D)Due to the fact that most of Peak Performance's current assets are tied-up in inventory,there is no need to worry about whether Peak Performance will be able to make loan payments.

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Definitions:

Well-Defined Problems

Problems that have clear goals, clearly defined solution paths, and a clear expected solution.

Hierarchical Organization

A system or organization in which people or groups are ranked one above the other according to status or authority.

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An approach or method used to identify the root of a problem and find an effective solution for it.

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