Smith Electronics reported the following figures in its 2017 and 2016 financial statements.

$$\begin{array} { | l | r | r | }
\hline & 2017 & 2016 \
\hline \text { Cash } & \$ 38,500 & \$ 25,000 \
\hline \text { Cash Equivalents } & 3,000 & 2,000 \
\hline \text { Total Current Liabilities } & 33,200 & 30,000 \
\hline
\end{array}$$ Compute the cash ratio for 2017 and 2016.What does the cash ratio measure? Use this information to discuss the business performance of Smith Electronics.

Question

Smith Electronics reported the following figures in its 2017 and 2016 financial statements.
 
$$\begin{array} { | l | r | r | } 
\hline & 2017 & 2016 \
\hline \text { Cash } & \$ 38,500 & \$ 25,000 \
\hline \text { Cash Equivalents } & 3,000 & 2,000 \
\hline \text { Total Current Liabilities } & 33,200 & 30,000 \
\hline
\end{array}$$ Compute the cash ratio for 2017 and 2016.What does the cash ratio measure? Use this information to discuss the business performance of Smith Electronics.

Quizplus · Accepted Answer

The Answer of Smith Electronics reported the following figures in its 2017 and 2016 financial statements.
 
$$\begin{array} { | l | r | r | } 
\hline & 2017 & 2016 \
\hline \text { Cash } & \$ 38,500 & \$ 25,000 \
\hline \text { Cash Equivalents } & 3,000 & 2,000 \
\hline \text { Total Current Liabilities } & 33,200 & 30,000 \
\hline
\end{array}$$ Compute the cash ratio for 2017 and 2016.What does the cash ratio measure? Use this information to discuss the business performance of Smith Electronics.

Smith Electronics Reported the Following Figures in Its 2017 and 2016