The Following Contains Information from the Records of the Wellborn

question 77

Multiple Choice

The following contains information from the records of the Wellborn Engineers and Architects. Wellborn Engineers and Architects
Selected Financial Information
December 31,2013
$\begin{array}{|l|r|}\hline\text { Current assets } & \$ 74,000 \\\hline \text { Current liabilities } & 44,000 \\\hline \text { Long-term assets } & 95,000 \\\hline \text { Long-term liabilities } & 60,000 \\\hline \text { Total revenues } & 50,000 \\\hline \text { Total expenses } & 30,000\\\hline\end{array}$ Which of the following statements is an accurate interpretation of Wellborn Engineers and Architects',PC current ratio?

• A) The company has $2.32 of current assets for every $1.00 of liabilities.
• B) The company has $1.68 of current assets for every $1.00 of current liabilities.
• C) The company has $1.58 of current assets for every $1.00 of liabilities.
• D) The company has $0.59 of current assets for every $1.00 of current liabilities.

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Definitions:

IPO Underpricing

The phenomenon where shares of a company are sold at a lower price during the initial public offering than the price at which they subsequently trade in the open market.

Offering Price

The price at which shares of a company are initially made available for purchase during an initial public offering or other issuance.

Firm Commitment

An underwriter's guarantee to the issuer to sell an entire offering of stocks or bonds at a set price.