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Presented below is information available for Sheridan Company.

Current Assets

Cash $3800
Short-term investments 50200
Accounts receivable 56000
Inventory 88000
Prepaid expenses 31000
Total current assets $229000

Total current liabilities are $50000. The acid-test ratio for Sheridan is:_______

Respuesta :

Zviko

Answer:

The acid-test ratio for Sheridan is 2.82.

Explanation:

The acid test ratio is also known as the Quick ratio. It measures company`s liquidity and is calculated as follows :

Acid Ratio = (Current Assets - Inventories) ÷ Current Liabilities

                 = ($229,000 - $88,000) ÷ $50,000

                 = 2.82