Answer:
To calculate the quick ratio, we need to use the formula:
Quick Ratio = (Cash + Notes + Accounts Receivable) / Current Liabilities
Looking at the balance sheet provided, we can see that there is no specific information about Accounts Receivable. However, we can calculate the quick ratio using the given information.
To do this, we add up the relevant assets (Cash and Notes) and divide it by the liabilities (Stock).
The quick ratio is:
Quick Ratio = (Cash + Notes) / Stock
From the balance sheet, we have:
Cash = $10,000
Notes = $45,000
Stock = $50,000
Now let's substitute the values into the formula:
Quick Ratio = ($10,000 + $45,000) / $50,000
Adding the values:
Quick Ratio = $55,000 / $50,000
Simplifying:
Quick Ratio = 1.1
Therefore, the decimal value for the quick ratio, rounded to the nearest tenth, is 1.1.
Explanation:
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