Question

SDJ, Inc., has net working capital of $2,170, current liabilities of $4,590, and inventory of $3,860. a. What is the current ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the quick ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answer 1

1.47 times ; 0.63 times

Step-by-step explanation:

Given that,

Net working capital = $2,170,

current liabilities = $4,590

Inventory = $3,860

Current assets = net working capital + current liabilities

= $2,170 + $4,590

= $6,760

Current ratio = current assets ÷ current liabilities

= $6,760 ÷ $4,590

= 1.47 times

Quick ratio = (current assets - inventory) ÷ current liabilities

= ($6,760 - $3,860) ÷ $4,590

= 0.63 times