Using the Following Year-End Information for Brim, LLC, Calculate the Current

question 26

Multiple Choice

Using the following year-end information for Brim, LLC, calculate the current ratio and acid-test ratio:

• A) 3.01 and 1.21
• B) 3.16 and .97
• C) 3.04 and 1.21
• D) 1.09 and 4.77
• E) None of these

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Definitions:

Current Liabilities

Obligations that will come due within one year or within the operating cycle, whichever is longer.

Common-Size Income Statement

A common-size income statement presents all line items as a percentage of revenue, allowing for easier comparison across companies and time periods by standardizing financial statements.

Net Sales

The revenue from sales after deducting returns, allowances for damaged or missing goods, and discounts.

Round

In mathematics or financial contexts, to round means adjusting a number to a specified degree of precision, often to the nearest whole number or decimal place.