Kannan Carpets,Inc

question 2

Multiple Choice

Kannan Carpets,Inc.has asked you to calculate the company's current ratio for 2001.All you have is a partial balance sheet and some assumptions.Using the information provided,calculate Kannan's current ratio for 2001.
Gross profit margin = 50%
Inventory turnover (COGS/Inv) = 5
2001 sales = $3,000
Assets Liabilities & Equity
Cash ? Accounts payable $50
AR $40 Accruals ?
Inventory ? Long-term debt $400
Net fixed assets $500 Equity 250
Total assets $900 Total liab.& equity ?

• A)0.3
• B)0.8
• C)1.6
• D)2.2

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Definitions:

Inherent Interests

Fundamental or natural concerns, desires, or motivations intrinsic to an individual or group.

Collaborative Approach

A strategy that involves working together cooperatively to achieve a common goal.

Competitive Negotiation

A type of negotiation where the parties involved strive to achieve their own best outcome, often at the expense of others.

Win/Lose Situation

A scenario wherein one party's gain is directly proportional to another party's loss.