Question

ALTOID CO. Balance Sheet At December 31, 2021 Assets: Cash $ 220 Short-term investments 550 Accounts receivable (net) 650 Inventory 800 Property, plant, and equipment (net) 1,150 Total assets $ 3,370 Liabilities and shareholders' equity: Current liabilities $ 800 Long-term liabilities 950 Common stock 500 Retained earnings 1,120 Total liabilities and shareholders' equity $ 3,370 Selected 2021 income statement information for Altoid Co. includes: Net Sales $ 8,400 Operating expenses 7,350 Income before interest and tax 1,050 Interest expense 100 Income tax expense 285 Net income $ 665 Required: Compute the following financial statement ratios for 2021: Altoid Co.'s current ratio. (Round your answer to 2 decimal places.)

Answer 1

3.4

Step-by-step explanation:

Current assets = Cash + Short-term investments + Accounts receivable (net) + Inventory

= $220 + $550 + $800 + $1,150

= $2,720

Current ratio = Current assets / Current liabilities

Current ratio = $2,720 / $800

Current ratio = 3.4