The data of Graham Brothers Corp. for two years are given below. $$\begin{array} { | l | r | r | }
\hline & { \mathbf { 2 0 1 8 } } & { \mathbf { 2 0 1 9 } } \
\hline \text { Cash and cash equivalents } & \$ 5,000 & \$ 12,100 \
\hline \text { Total current liabilities } & 21,000 & 34,000 \
\hline
\end{array}$$ Based on the above information, which of the following statements is true?

Question

The data of Graham Brothers Corp. for two years are given below. $$\begin{array} { | l | r | r | } 
\hline & { \mathbf { 2 0 1 8 } } &  { \mathbf { 2 0 1 9 } } \
\hline \text { Cash and cash equivalents } & \$ 5,000 & \$ 12,100 \
\hline \text { Total current liabilities } & 21,000 & 34,000 \
\hline
\end{array}$$ Based on the above information, which of the following statements is true?

Quizplus · Accepted Answer

The cash ratio is calculated by dividing cash and cash equivalents by current liabilities. 
In 2018, the cash ratio = (14,000 + 21,000) / 186,000 = 0.119
In 2019, the cash ratio = (34,000 + 8,000) / 104,000 = 0.403
Therefore, the cash ratio has increased from 0.238 in 2018 to 0.356 in 2019, which is option D.

The Data of Graham Brothers Corp Based on the Above Information, Which of the Following Statements