question archive Ace Industries has current assets equal to $9 million
Ace Industries has current assets equal to $9 million
Subject:FinancePrice:2.86 Bought3
Ace Industries has current assets equal to $9 million. The company's current ratio is 2.0, and its quick ratio is 1.5. What is the firm's level of current liabilities? What is the firm's level of inventories? Do not round intermediate calculations. Round your answers to the nearest dollar.
Current liabilities: $
Inventories: $
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Current Ratio = Current Assets / Current Liabilities
Current Liabilities = Current Assets / Current Ratio = 9,000,000 / 2 = $4,500,000
Quick Ratio = (Current Assets - Inventories) / Current Liablities
Current assets - Inventories = Quick Ratio x Current Liabilities
Inventories = Current Assets - Quick Ratio x Current Liabilities = 9,000,000 - 1.5 x 4,500,000 = $2,250,000
