Question

SDJ, Inc., has net working capital of $1,910, current liabilities of $5,610, and inventory of $1,265. What is the current ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current ratio times What is the quick ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Quick ratio times

Answer 1

Current Ratio = 1.34

Quick Ratio = 1.11

Step-by-step explanation:

Calculate current asset from following formula

Net Working Capital = Current Asset - Current Liabilities

$1,910 = Current Asset - 5,610

Current Asset = $1,910 + 5,610

Current Asset = $7,520

Current Ratio = Current Asset / Current Liabilities = 7,520 / 5,610 = 1.34

Quick Ratio = ( Current Asset - Inventory ) / Current Liabilities

Quick Ratio = ( 7,520 - 1,265 ) / 5,610 = 1.11