Muggles Manufacturing Has Asked You to Calculate the Company's Current

question 111

Multiple Choice

Muggles Manufacturing has asked you to calculate the company's current ratio. All you have is the partial balance sheet below, the year's sales revenue, and two ratios also shown below. Using that information, calculate Muggles' current ratio. Sales = $3,000
Cost Ratio = 45%
Inventory Turnover (COGS/Inv) = 5.0
$\begin{array}{llll}\text { Asssets }&&\text { Liabilities \& Equity }\\\text { Cash } & ? ? ? ? ? & \text { Accounts Payable } & \$ 50 \\\text { AR } & \$ 40 & \text { Accruals } & ? ? ? ? ? ? \\\text { Inventory } & ? ? ? ? ? & \text { Longterm Debt } & \$ 380 \\\text { Net Fixed Assets } & \$ 500 & \text { Equity } & \$ 250\\\text { Total Assets }&\$830&\text { Total Liabilities \& Equity }&??????\end{array}$

• A) .35
• B) .85
• C) 1.65
• D) 2.25

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