Mathematics: Carl s Toy Factory had the following items listed on its balance sheet. Cash, 1,590; Accounts Receivable, 5,746; Accounts Payable, 9,563; Inventory, 7,879; Equipment, 35,743; Land, 50,000; Buildings, 135,487; Mortgage, 125,276. Based on this information what was Carl s quick ratio?

c and fStep-by-step explanation:...

Carl s Toy Factory had the following items listed

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21.01.2022

0.8 : 1

Step-by-step explanation:

Given:

Carl's Toy Factory had the following items listed on its balance sheet.

Cash = 1,590

Accounts Receivable = 5,746

Inventory= 7,879;

Accounts Payable = 9,563

Equipment = 35,743;

Land = 50,000

Buildings= 135,487

Mortgage = 125,276

Question asked:

What was Carl's quick ratio?

Solution:

As we know:

$Quick\ ratio=\frac{Cash + Cash Equivalents + Marketable \ Securities + Accounts \ Receivable }{Current\ liabilities}$

$=\frac{1590+00+00+5746}{9563} \\=\frac{7336}{9563}=0.8 : 1$

Therefore, based on this information, Carl's quick ratio is 0.8 : 1

Note : Account payable is current liabilities and hence divided in above formula.

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