Using the Following Year-End Information for Bauman,LLC,calculate the Current Ratio

question 141

Multiple Choice

Using the following year-end information for Bauman,LLC,calculate the current ratio and acid-test ratio:
$$\begin{array} { l r } \text { Cash } & \$ 48,000 \\\text { Short-term investrnents } & 12,000 \\\text { Accounts receivable } & 45,000 \\\text { Inventory } & 225,000 \\\text { Prepaid expenses } & 12,500 \\\text { Accounts payable } & 86,500 \\\text { Other current payables } & 22,000\end{array}$$

• A) 3.01 and 1.21
• B) 3.16 and .97
• C) 3.04 and 1.21
• D) 1.09 and 4.77
• E) 3.16 and 1.21

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Definitions:

Revenue

The total amount of money received by a company for goods sold or services provided during a certain period.

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Long Run

A period in economics where all factors of production and costs are variable, allowing companies to adjust to achieve the most efficient scale of operation.

Operating Profits

Earnings before interest and taxes (EBIT), representing the profit from a business's normal core business operations.