The top part of Mars, Inc.'s 2018 balance sheet is listed as follows (in millions of dollars).
$$\begin{array} { l r l r }
\text { Current assets: } & & \text { Curreat liabilities: } & \
\text { Cash ard marketable securities } & \$ 10 & \text { Accrued wages and taxes } & \mathbf { 2 0 } \
\text { Accounts receivable } & 40 & \text { Accounts payable } & 30 \
\text { Irventory } & 160 & \text { Notes payable } & 40 \
\text { Total } & \$ 210 & \text { Total } &\$ 90
\end{array}$$
What are Mars, Inc.'s current ratio, quick ratio, and cash ratio for 2018?
A) 0.1111, 0.5556, 0.2
B) 2.3333, 0.5556, 0.1111
C) 4.2, 1.0, 0.2
D) 10.5, 6.0, 1.0

Question

The top part of Mars, Inc.'s 2018 balance sheet is listed as follows (in millions of dollars).
$$\begin{array} { l r l r } 
\text { Current assets: } & & \text { Curreat liabilities: } & \
\text { Cash ard marketable securities } & \$ 10 & \text { Accrued wages and taxes } & \mathbf { 2 0 } \
\text { Accounts receivable } & 40 & \text { Accounts payable } & 30 \
\text { Irventory } & 160 & \text { Notes payable } & 40 \
\text { Total } & \$ 210 & \text { Total } &\$ 90
\end{array}$$
What are Mars, Inc.'s current ratio, quick ratio, and cash ratio for 2018?
A) 0.1111, 0.5556, 0.2
B) 2.3333, 0.5556, 0.1111
C) 4.2, 1.0, 0.2
D) 10.5, 6.0, 1.0

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities (210/90 = 2.3333). The quick ratio is calculated as (current assets - inventory) divided by current liabilities ((210-160)/90 = 0.5556). The cash ratio is calculated as cash and marketable securities divided by current liabilities (10/90 = 0.1111).

The Top Part of Mars, Inc What Are Mars, Inc