Question

Accounts payable $27,577
Accounts receivable 71,254
Accrued liabilities 6,902
Cash 20,740
Intangible assets 35,144
Inventory 75,509
Long-term investments 113,352
Long-term liabilities 73,417
Marketable securities 30,292
Notes payable (short-term) 26,866
Property, plant, and equipment 605,309
Prepaid expenses 1,787

Required:
Based on the data for Privett Company, what is the quick ratio, rounded to one decimal point?

Answer 1

Answer:

1.99

Explanation:

Quick ratio is computed as;

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

Where

Current liabilities = $27,577 Accounts payable + $6,902 Accrued liabilities + $26,866 Notes payable = $61,345

Quick ratio = ($20,740 + $30,292 + $71,254) / $61,345

= $122,286 / $61,345

= 1.99