Measures of Solvency and Credit Risk
Shown Below Are Selected

question 127

Essay

Measures of solvency and credit risk
Shown below are selected items appearing in a recent balance sheet of Grant Products. (Dollar amounts are in thousands.)
$$\begin{array} { | l | r | } \hline \text { Cash and cash equivalents } & \mathbf { \$ 6 2 0 } \\\hline \text { Irvestrnents in securities } & \mathbf { \$ 0 0 } \\\hline \text { Receivables } & \mathbf { \$ } , 400 \\\hline \text { Irventories } & \$ 1,100 \\\hline \text { Prepaid experise arid other current assets } & \$ 450 \\\hline \text { Plant and equiprnent } & \mathbf { \$ , 3 0 0 } \\\hline \text { Accounts payable } & \$ 1,600 \\\hline \text { Bark loarns payable within one year } & \mathbf { \$ 3 0 0 } \\\hline \text { Income taxes payable } & \mathbf { \$ 3 0 0 } \\\hline \text { Retained Earnings } & \mathbf { \$1 7 0 0 }\\\hline \end{array}$$ (a) Compute the following:
(1) Total quick assets $____________
(2) Total current assets $____________
(3) Total current liabilities $____________
(4) Quick ratio ______ to 1
(5) Current ratio ______ to 1
(b) Research indicates an industry average quick ratio is 1.3 to 1, and a current ratio of 2.3 to 1. Based upon this information, does Grant Products appear more or less solvent than the average company in its industry? Explain briefly.

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Definitions:

Genome-Wide Association Study

A method in genetics that examines associations between genetic variants and traits in organisms across the entire genome.

Transgenic Organism

A plant or animal that has foreign DNA incorporated into its genome.

Recombinant Organism

An organism that has been genetically engineered to contain and express genes from another species.

DNA Ligase

An enzyme that facilitates the joining of DNA strands together by catalyzing the formation of a phosphodiester bond between them.