Question

Privett Company Accounts payable $34,234 Accounts receivable 69,135 Accrued liabilities 6,513 Cash 15,673 Intangible assets 43,529 Inventory 71,631 Long-term investments 90,421 Long-term liabilities 76,608 Marketable securities 31,804 Notes payable (short-term) 21,712 Property, plant, and equipment 614,336 Prepaid expenses 1,617 Based on the data for Privett Company, what is the quick ratio, rounded to one decimal point

Answer 1

Answer:

1.87%

Explanation:

Based on the above information, the formula for Quick ratio is

= ( Cash + Marketable securities + Accounts receivables ) / Current liabilities

Where;

Cash = $15,673

Marketable securities = $31,804

Accounts receivables = $69,135

Current liabilities = Accounts payable + Accrued liabilities + Notes payable

= $34,234 + $6,513 + $21,712

= $62,459

Quick ratio

= ($15,673 + $31,804 + $69,135) / $62,459

= $116,612 / $62,459

= 1.87%