Question

Sheridan Company has current assets of $74000, current liabilities of $100000, long-term assets of $176000 and long-term liabilities of $79000. Sheridan Company's working capital and its current ratio are:

Answer 1

Current ratio = 0.74 : 1

Working Capital = ($26,000)

Step-by-step explanation:

Given:

Current assets = $74,000

Current liabilities = $100,000

Find:

Working Capital

Current ratio

Computation:

Working Capital = CA - CL

Working Capital = $74,000 - $100,000

Working Capital = ($26,000)

Current ratio = [CA / CL]

Current ratio = [$74,000 / $100,000]

Current ratio = 0.74 : 1