The top part of Mars, Inc.'s 2013 balance sheet is listed as follows (in millions of dollars). $$\begin{array} { l r c r }
\text { Current assets: } & & \text { Current liabilities: } & \
\text { Cash and marketable } & & \text { Accrued wages and } & \
\text { securities } & \$ 10 & \text { taxes } & \$ 20 \
\text { Accounts receivable } & 40 & \text { Accounts payable } & 30 \
\text { Inventory } & 160 & \text { Notes payable } & 40 \
\text { Total } & \$ 210 & \text { Total } & \$ 90
\end{array}$$ What are Mars, Inc.'s current ratio, quick ratio, and cash ratio for 2013?
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 2013 balance sheet is listed as follows (in millions of dollars). $$\begin{array} { l r c r } 
\text { Current assets: } & & \text { Current liabilities: } & \
\text { Cash and marketable } & & \text { Accrued wages and } & \
\text { securities } & \$ 10 & \text { taxes } & \$ 20 \
\text { Accounts receivable } & 40 & \text { Accounts payable } & 30 \
\text { Inventory } & 160 & \text { Notes payable } & 40 \
\text { Total } & \$ 210 & \text { Total } & \$ 90
\end{array}$$ What are Mars, Inc.'s current ratio, quick ratio, and cash ratio for 2013?
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

Current ratio = Current assets / Current liabilities = 210/90 = 2.3333
Quick ratio = (Cash and marketable securities + Accounts receivable + Inventory) / Current liabilities 
= (10 + 40 + 160) / 90 = 0.5556
Cash ratio = (Cash and marketable securities) / Current liabilities = 10/90 = 0.1111

Therefore, Option B (2.3333, 0.5556, 0.1111) is the correct choice for the current ratio, quick ratio, and cash ratio, respectively.

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