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:

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A type of good for which demand increases as the consumer's income increases and decreases as the consumer's income decreases.

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