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24 December, 22:58

Liquidity Ratios You have the following information on Marco's Polo Shop: total liabilities and equity = $212 million; current liabilities = $52 million, inventory = $67 million, and quick ratio = 2.5 times. Using this information, what is the balance for fixed assets on Marco Polo's balance sheet?

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  1. 24 December, 23:28
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    Fixed assets = $15,000,000

    Explanation:

    Quick ratio = (Current assets - Inventory) : Current liabilities

    2.5 = (Current assets - $67,000,000) : $52,000,000

    $130,000,000 = Current assets - $67,000,000

    Current assets = $197,000,000

    Total assets = Total liabilities and equity

    Total assets = Current assets + Fixed assets

    $212,000,000 = $197,000,000 + Fixed assets

    Fixed assets = $15,000,000
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