The Following Information Pertains to Ortiz Company What Is the Current Ratio for Ortiz?
A) 1

question 89

Multiple Choice

The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. $\begin{array}{lr}\text { Assets }\\\text { Cash and short-term investments } & \$ 45,000 \\\text { Accounts receivable (net) } & 30,000 \\\text { Inventory } & 20,000 \\\text { Property, plant and equipment } & 210,000 \\\quad \text { Total Assets } & \$ 305,000\\\\\text { Liabilities and Stockholders' Equity }\\\text { Current liabilities } & \$ 50,000 \\\text { Long-term liabilities } & 95,000 \\\text { Stockholders' equity-common } & 160,000 \\\quad \text { Total Liabilities and Stockholders' Equity } & \$ 305,000 \\\\\text { Income Statement }\\\text { Sales } & \$ 120,000 \\\text { Cost of goods sold } & 66,000 \\\text { Gross profit } & 54,000 \\\text { Operating expenses } & 30,000 \\\quad \text { Net income } & \$ 24,000\\\\\text { Number of shares of common stock } & 6,000 \\\text { Market price of common stock } & \$ 20 \\\text { Dividends per share } & \$ 50\end{array}$ What is the current ratio for Ortiz?

• A) 1.90
• B) 1.50
• C) 1.30
• D) .53

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Definitions:

Dow Jones Industrial Average

A stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.

Discrete Random Variables

Variables that take on a countable number of distinct and separate values, often resulting from counting processes.

Rolling Dice

An activity involving throwing a die or dice to generate random numbers, often used in games for movement, outcomes, or decision-making mechanisms.

Income

The money received, especially on a regular basis, for work or through investments.