Asked by tiffani supermom on May 21, 2024
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Thompson Laser Company had cash of $160,000; accounts receivable of $136,000; and current liabilities of $104,000. Compute the acid test ratio.
Acid Test Ratio
A financial metric that evaluates a company's ability to pay off its current liabilities with quick assets like cash, marketable securities, and accounts receivable.
Current Liabilities
Short-term financial obligations that are due within one year or within the normal operating cycle of a business.
Accounts Receivable
Money owed to a business for goods or services that have been delivered or used but not yet paid for by customers.
- Perform calculations of acid-test ratios and apprehend their significance.
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Learning Objectives
- Perform calculations of acid-test ratios and apprehend their significance.