Go Cars has $200 in cash, $500 in accounts receivable, $400 in marketable securities, and $700 in inventory. Assuming the company also has $200 in accounts payable and $200 in unearned sales revenue, what is its cash ratio?

Question

Quizplus · Accepted Answer

The cash ratio is calculated as (Cash + Marketable Securities) / Current Liabilities. Here, it's ($200 + $400) / ($200 + $200) = $600 / $400 = 1.50.

Go Cars Has $200 in Cash, $500 in Accounts Receivable