Liquidity and Asset Management Ratios Oasis Products,Inc.has current liabilities = $10 million,current ratio = 1.5 times,inventory turnover ratio = 12 times,average collection period = 20 days,and sales = $100 million.What is the value of their cash and marketable securities?
A)$1,187,215
B)$8,333,333
C)$15,000,000
D)$17,146,188

Question

Quizplus · Accepted Answer

The correct answer is A because the cash and marketable securities can be calculated as follows:Cash and marketable securities = Current liabilities / Current ratio= $10 million / 1.5 times= $1,187,215