The Jamesway Printing Corporation has current assets of $3.2 million. Of this total, $1.2 million is inventory, $0.5 million is cash, $1.0 million is accounts receivable, and the balance is marketable securities. Jamesway has $1.5 million in current liabilities. Round your answers to two decimal places. a. What are the current and the quick ratios for Jamesway? Current ratio: Quick ratio: b. If Jamesway takes $0.25 million in cash and pays off $0.25 million of current liabilities, what happens to its current and quick ratios? What happens to its real liquidity? New current ratio: New quick ratio: c. If Jamesway sells $0.6 million of its accounts receivable to a bank and uses the proceeds to pay off short-term debt obligations, what happens to its current and quick ratios? New current ratio: New quick ratio:
The Jamesway Printing Corporation has current assets of $3.2 million. Of this total, $1.2 million is inventory, $0.5 million is cash, $1.0 million is accounts receivable, and the balance is marketable securities. Jamesway has $1.5 million in current liabilities. Round your answers to two decimal places. a. What are the current and the quick ratios for Jamesway? Current ratio: Quick ratio: b. If Jamesway takes $0.25 million in cash and pays off $0.25 million of current liabilities, what happens to its current and quick ratios? What happens to its real liquidity? New current ratio: New quick ratio: c. If Jamesway sells $0.6 million of its accounts receivable to a bank and uses the proceeds to pay off short-term debt obligations, what happens to its current and quick ratios? New current ratio: New quick ratio:
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 8P
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