BUSN 1010 Financial Analysis Decision.docx - BUSN 1010...

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BUSN 1010 – Business Enterprise Financial Analysis Assignment 10 Points Potz and Pans, a small gift shop, has current assets of $45,000 (including inventory valued at $30,000) and $9,000 in current liabilities. Wannabees, a specialty clothing store has current assets of $150,000 (including inventory valued at $125,000) and $85,000 in current liabilities. Both business have applied for loans. 1) Calculate and present the current ratio for each company. Which company is more likely to get the loan? Why? 2) The acid test ratio subtracts the value of the firm's inventory from its total current assets. Because inventory is often difficult to sell, this ratio is considered an even more reliable measure of a business's

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