The Financial Statements for Stephens' Electric Company Include the Following

question 7

Multiple Choice

The financial statements for Stephens' Electric Company include the following items: $$\begin{array} { l r r } & 2017 & 2016 \\\text { Cash } & \$ 55,000 & \$ 51,000 \\\text { Cash Equivalents } & 23,500 & 20,000 \\\text { Net Accounts Receivable } & 30,000 & 26,000 \\\text { Merchandise Inventory } & 81,000 & 65,000 \\\text { Total Assets } & 530,000 & 548,000 \\\text { Accounts Payable } & 44,500 & 35,000 \\\text { Salaries Payable } & 24,000 & 20,000 \\\text { Long-term Note Payable } & 61,000 & 57,000 \\\text { Income From Operations } & 124,500 & 115,000 \\\text { Interest Expense } & 28,000 & 33,000\end{array}$$ Compute the 2016 cash ratio.(Round your answer to two decimal places. )

• A)1.29
• B)1.15
• C)2.03
• D)0.63

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Definitions:

Call Option

A financial contract giving the buyer the right, but not the obligation, to purchase an asset at a specified price within a certain time period.

Spot Exchange Rates

The current exchange rate at which a currency can be bought or sold for immediate delivery.

Speculative Derivatives

Financial instruments used to speculate on the future movements of asset prices, without intention of holding the underlying assets.