Measures of Solvency and Credit Risk

question 81

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.) (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:

Textiles

Materials made by weaving, knitting, crocheting, or bonding fibers together to create fabric used in the production of clothing, household goods, and other products.

Planks and Stilts

Architectural or construction elements, with planks being long, flat pieces of timber used for building purposes, and stilts being poles, posts, or pillars used to raise structures or objects above the ground.

Food Scarcity

The situation that arises when the availability of food in a region is insufficient to meet the dietary needs of its population.

Paleolithic

Relating to the earliest period of the Stone Age, characterized by the development of the first stone tools by early humans.