A Corporation Reports the Following Year-End Balance Sheet Data A) 037
B) 0

question 158

Short Answer

A corporation reports the following year-end balance sheet data. The company's current ratio equals: $\begin{array}{lrlr}\text { Cash } & \$ 40,000 & \text { Current liabilities } & \$ 75,000 \\\text { Accounts receivable } & 55,000 & \text { Long-term liabilities } & 35,000 \\\text { Inventory } & 60,000 & \text { Common stock } & 100,000\\\text { Equipment }&145,000&\text { Retained earnings }&90,000\\\text { Total assets }&\$300,000&\text { Total liabilities and equity }&\$300,000\\\end{array}$
A) 0.37
B) 0.58
C) 0.63
D) 1.27
E) 2.07

• A) 0.37
• B) 0.58
• C) 0.63
• D) 1.27
• E) 2.07

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Definitions:

Long-Run Adjustment

The process of economic agents fully adapting to changes in conditions or policies over time, reaching a new equilibrium.

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, representing the additional amount earned beyond the next best alternative.

Economies of Scale

Cost advantages that a business can achieve by increasing the scale of production, leading to a lower cost per unit of output.

Economic Profit

The difference between a firm’s total revenue and its total costs, including both explicit and implicit costs.