Asked by Chirag Berry on May 21, 2024
Verified
Warm Winters Linen, Inc. had current liabilities of $500,000; cash of $300,000; accounts receivable of $150,000; and ending inventory of $250,000. Compute the working capital ratio. (Round answer to two decimal places.)
Working Capital Ratio
A financial metric that measures a company's ability to pay off its short-term liabilities with its short-term assets, indicating liquidity.
Current Liabilities
Short-term financial obligations due within one year or within a company's operating cycle, whichever is longer.
- Understand the concept of working capital ratio.
Verified Answer
SD
Learning Objectives
- Understand the concept of working capital ratio.