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Solvent Ltd Has a Quick Ratio of 1

question 5

Multiple Choice

Solvent Ltd has a quick ratio of 1.2:1 and its current liabilities amount to $200,000. If it purchased $40,000 of inventory on credit, its new quick ratio would be:


Definitions:

Treasury Stock

Stocks that have been distributed and then bought back by the issuing corporation, thus decreasing the volume of available shares in the market.

Total Stockholders' Equity

The total value of a company's assets minus its liabilities, representing the ownership interest of the stockholders.

Corporate Form

A legal structure used by organizations that enables them to be recognized as separate legal entities from their owners, providing limited liability protection.

Partnership Form

A type of business entity where two or more individuals share ownership and the responsibilities of running the business.

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