Financial Statements for March Company Appear Below -March Company's Current Ratio at the End of Year 2

question 145

Multiple Choice

Financial statements for March Company appear below:

$\begin{array}{|l|r|}\hline&\begin{array}{r}\text { March Company } \\\text { Income Statement }\\\text { For the Year Ended December 31, Year } \\2 \\\text { (dollars in thousands) } \\\end{array} \\\hline \text { Sales (All on Account) } & \$ 1610 \\\hline \text { Costs of Goods Sold } & \$ 1120 \\\hline \text { Gross Margin } & \$ 490 \\\hline \text { Operating Expenses } & \$ 190 \\\hline \text { Net Operating Income } & \$ 300 \\\hline \text { Interest Expense } & \$ 50 \\\hline \text { Net Income before Taxes } & \$ 250 \\\hline \text { Income Taxes (30\%) } & \$ 75 \\\hline \text { Net Income } & \$ 175 \\\hline\end{array}$
-March Company's current ratio at the end of Year 2 was closest to which of the following?

• A) 0.47 to 1.
• B) 0.49 to 1.
• C) 1.27 to 1.
• D) 1.45 to 1.

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Definitions:

Price Level

A measure of the average prices of goods and services in the economy at a given time, often used to assess inflation rates.

Stock Variable

A quantity measured at a specific point in time, representing a snapshot of a certain economic variable such as capital or debt.

Periodic Variable

A variable that changes at regular intervals over time in a predictable pattern.

Dummy Variable

A numerical variable used in regression analysis to represent subgroups of the sample in your study.