The current ratio (assets/liabilities) of company X is 2.9. Given that the current assets are $377000, find the current liabilities:

Current liabilities = 130000

The board of directors determines that the current ratio must never be below 2.6. What is the maximum amount that the company can borrow?

Question

Mathematics

Konner Stout

3 March, 06:04

The current ratio (assets/liabilities) of company X is 2.9. Given that the current assets are $377000, find the current liabilities:

Current liabilities = 130000

The board of directors determines that the current ratio must never be below 2.6. What is the maximum amount that the company can borrow?

+2

Answers (1)

Know the Answer?

Dixie Steele · Answer 1

The maximum amount that the company X can borrow is $ 145,000

Step-by-step explanation:

1. Let's review the information given to us to answer the question correctly:

Current ratio of assets/liabilities = 2.9

Current assets = $ 377,000

Current liabilities = Currents assets/Ratio = 377,000/2.9 = $ 130,000

2. The board of directors determines that the current ratio must never be below 2.6. What is the maximum amount that the company can borrow?

Desired ratio of assets/liabilities = 2.6

Current assets = $ 377,000

Desired liabilities = $ Current assets/Ratio = 377,000/2.6 = $ 145,000

The maximum amount that the company X can borrow is $ 145,000

The current ratio (assets/liabilities) of company X is 2.9. Given that the current assets are $377000, find the current liabilities:Current liabilities = 130000The board of directors determines that the current ratio must never be below 2.6. What is the maximum amount that the company can borrow?