Prepare a Vertical Analysis

question 13

Multiple Choice

Prepare a vertical analysis. Round percents to the nearest tenth of a percent.
-Current assets: $407,000 Current liabilities: $189,000
Liquid assets: $149,000

• A)Current ratio = 2.15 which is fine
• Acid-test ratio = 0.79 which is too low
• B)Current ratio = 2.73 which is fine
• Acid-test ratio = 0.79 which is too low
• C)Current ratio = 2.15 which is fine
• Acid-test ratio = 2.73 which is fine
• D)Current ratio = 0.79 which is too low
• Acid-test ratio = 2.15 which is fine

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Definitions:

Safeguards

measures or mechanisms put in place to protect against unforeseen, undesired, or unauthorized access to or modification of information and systems.

Accountability

The obligation of an individual or organization to account for its activities, accept responsibility for them, and disclose the results in a transparent manner.

Answerability

The quality or state of being responsible, especially to explain or justify one's actions to someone who has the right to ask for such explanations.

Liability

Legal responsibility for one's actions or the obligation to compensate for harm caused to others, enforceable by civil legal processes.