Compute the current and quick ratios for each company

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Question - Liquidity ratios. Edison, Stagg, and Thornton have the following financial information at the close of business on July 10:


Edison

Stagg

Thornton

Cash

$6,000

$5,000

$4,000

Short-term investments

3,000

2,500

2,000

Accounts receivable

2,000

2,500

3,000

Inventory

1,000

2,500

4,000

Prepaid expenses

800

800

800

Accounts payable

200

200

200

Notes payable: short-term

3,100

3,100

3,100

Accrued payables

300

300

300

Long-term liabilities

3,800

3,800

3,800

Compute the current and quick ratios for each of the three companies. Which firm is the most liquid? Why?

Reference no: EM132036380

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