Examples illustrate about the current and quick ratios

Assignment Help Financial Management

Reference no: EM13849157

The Jamesway Printing Corporation has current assets of 3.0million.Of this total, 1.0 Million is Inventory, 0.5 million iscash, 1.0 million is accounts receivable, and the balance is marketable securities. Jamesway has 1.5 million in current liabilities.

a) What are the current and quick ratios for Jamesway?

b) If jamesway takes 0.25 million in cash and pays off 0.25million of current liabilities, what happens to its current and quick ratios? What happens to its real liquidity?

c) IF Jamesway sells 0.5 million of its accounts receivable to a factor (a type of specialized financial institution that buys accounts receivable: and uses the proceeds to pay off short term debt obligations, what happens to its current and quick ratio?

d) IF Jamesway sells 1.0 million in new stock and place the proceeds in marketable securities, what happens to its current and quick ratios?

e) What do these examples illustrate about the current and quick ratios?

Reference no: EM13849157

Questions Cloud

Draw the profit diagrams at maturity : Draw the profit diagrams at maturity for the following portfolios consisting of options. Clearly label all the important points in the diagrams.

What would be the fair forward price for this contract : S&P 500 index has a dividend yield of 3% today. The current index is trading at $1800 and the risk-free interest rate is 5% per annum with continuous compounding. An investor would like to enter into a short one-year forward contract on the index. Wh..

Dramatically different market-to-book ratios : The stock of Jenkins Corporation, a major steel producer, is currently selling for $50 per share. The book value per share is $125. In contrast, the price per share of Data quests stock is $40, compared to a book value per share of $10. Dataquest, a ..

A function f is given along with a number c : In each problem, a function f is given along with a number c in its domain. a. find the difference quotient of f

Examples illustrate about the current and quick ratios : The Jamesway Printing Corporation has current assets of 3.0million.Of this total, 1.0 Million is Inventory, 0.5 million iscash, 1.0 million is accounts receivable, and the balance is marketable securities. What are the current and quick ratios for Ja..

Compute the firms weighted average cost of capital : Compute the firms weighted average cost of capital

Organizational diagnostic models- an integrative review : Falletta, S. V. (2013) Organizational diagnostic models: an integrative review & synthesis. Organizational Intelligence Institute (www.oi-institute.com)

Arbitrage strategy using spot rates and forward rate : The annualized 6-month spot rate is 4% and the annualized 12-month spot rate is 6%. The annualized forward rate from the end of 6th month to the end of 12th month is 10%. Develop an arbitrage strategy using the spot rates and the forward rate.

Newly formed retirement fund : Suppose that you are the manager of a newly formed retirement fund. You are to set up a series of semiannual payments to accumulate a sum of $1,000,000 in ten years. What is the required semiannual payment, to the nearest dollar? Suppose that immedia..

User Account

All Pages