Question

What is the value of a company's current assets if the company has \$5500$5500dollar sign, 5500 in inventory, \$1500$1500dollar sign, 1500 in prepaid expenses, \$8000$8000dollar sign, 8000 in current liabilities and a quick ratio of 0.70.70, point, 7

Answer 1

The company's current assets value is $12,600

Step-by-step explanation:

Quick Assets ratio = (Current Assets – Inventories – Prepaid Expenses) / Current Liabilities

=> Current Assets = Quick Assets ratio x Current Liabilities + Inventories + Prepaid Expenses = 0.7 x $8,000 + $5,500 + $1,500 = $12,600