Question

question content area measures of liquidity, solvency, and profitability the comparative financial statements of marshall inc. are as follows. the market price of marshall common stock was $82.60 on december 31, 20y2.

Answer 1

It should be noted that the working capital will be $1584000, the current ratio is 2.80 while the quick ratio is 2.20.

What exactly does working capital mean?

Simply put, working capital is the money you have on hand to meet your immediate and short-term obligations. If you wish to make absolutely sure that current working capital meets your needs, you must evaluate your current levels, project your future needs.

Briefing:

From the complete information, the working capital is calculated thus:

= Current asset - Current liabilities

= 2464000 - 880000

= 1584000

The current ratio will be:

= 2464000 / 880000

= 2.80

The quick ratio will be calculated thus:

Total current asset = 2464000

Less: Inventory = 420000

Less: Prepaid expenses = 108000.

Total quick assets = 1936000

Total current liabilities = 8800000

Quick ratio = 2.20

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