Calculate and present the current ratio for each company

Assignment Help Operation Management

Reference no: EM132155068

Potz and Pans, a small gift shop, has current assets of $45,000 (including inventory valued at $30,000) and $9,000 in current liabilities. Wannabees, a specialty clothing store has current assets of $150,000 (including inventory valued at $125,000) and $85,000 in current liabilities. Both businesses have applied for loans. Click the “calculators” box on the toolbar at bankrate.com then click on Small Business to answer the following questions.

1) Calculate and present the current ratio for each company. Which company is more likely to get the loan? Why?

2) The acid test ratio subtracts the value of the firm's inventory from its total current assets. Because inventory is often difficult to sell, this ratio is considered an even more reliable measure of a business's ability to repay loans than the current ratio. Calculate and present the acid test ratio for each business and decide whether you would give either the loan. Why or why not for each?

Reference no: EM132155068

Questions Cloud

Key dimensions of health system performance : Which of the following is a form of rulemaking for an agency. Key dimensions of health system performance include all of the following EXCEPT

Describe how you can apply the financial concepts : Describe how you can apply the financial concepts from the article to your current health care organization or a health care organization.

Determine which roles are the best suited : Determine which of the six (6) roles is best suited overall for working directly with residents and their families, and which is best suited for working.

Chance of stock-out associated with replenishment decision : Assume that the company is willing to tolerate a 2.1% chance of a stock-out associated with a replenishment decision.

Calculate and present the current ratio for each company : Calculate and present the current ratio for each company. Which company is more likely to get the loan? Why?

Description of training and development consulting company : Assignment - Training Proposal - Brief description of your own Training and Development Consulting Company. How you would conduct a Needs Analysis

What are the pros and cons of that app : There are many apps and computer programs available to analyze your die. Examples are MyFitnessPal, eaTracker.ca, SelfNutrition, and Cronometer.

Report on the topics of cremation and alkaline hydrolysis : Report on the topics of cremation and alkaline hydrolysis- what's the difference, how are they similar, what is the process.

Defining the vaccine controversies : Vaccine controversies have occurred since almost 80 years before the terms vaccine and vaccination were introduced, and continue to this day.

User Account

All Pages