Question

he financial statements of Denison Furniture Company include the following items: ​ 2019 2018 ​ ​ ​ Cash $53,500 $53,000 Short-term Investments 29,000 15,000 Net Accounts Receivable 92,000 105,000 Merchandise Inventory 162,000 142,000 Total Assets 532,000 551,000 Total Current Liabilities 235,000 215,000 Long-term Note Payable 62,000 60,000 ​ ​ ​ What is the 2019 cash ratio? (Round your answer to two decimal places)

Answer 1

The cash ratio is calculated by dividing cash and short-term investments by current liabilities.

Cash ratio for 2019 = (53,500 + 29,000) / 235,000 = 0.39

Rounding to two decimal places, the 2019 cash ratio is 0.39.

Step-by-step explanation: