Mike Company Has Cash of $56,000; Net Accounts Receivable of $67,000;

question 45

Short Answer

Mike Company has cash of $56,000; net accounts receivable of $67,000; short-term investments of $12,000; and inventory of $40,000. It also has $45,000 in current liabilities and $75,000 in long-term liabilities. What is the quick ratio for Mike Company ?

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Definitions:

Constant Payments

A fixed amount of money paid periodically in a loan agreement or financial investment, such as in an annuity or mortgage.

Interest

A fee levied for the use of borrowed money, frequently expressed in terms of an annual percentage rate.

Annuity Due

An annuity in which the payments are made at the beginning of each period, as opposed to at the end.

Present Value

The value today of a future payment or series of payments, discounted at a specified interest rate.