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30 November, 15:16

Carla Vista Corp. has total current assets of $11,420,000, current liabilities of $4,354,000, and a quick ratio of 0.99. How much inventory does it have?

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  1. 30 November, 15:36
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    Carla Vista Corp. has Inventory of $7,109,540

    Explanation:

    Carla Vista Corp. has current liabilities of $4,354,000, and a quick ratio of 0.99

    The quick ratio is calculated by the following formula:

    Quick ratio = (Cash & equivalents + Short Term investments + Accounts receivable) / Current Liabilities

    (Cash & equivalents + Short Term investments + Accounts receivable) = Quick ratio x Current Liabilities = $4,354,000 x 0.99 = $4,310,460

    Total current assets = (Cash & equivalents + Short Term investments + Accounts receivable) + Inventory

    Inventory = Total current assets - (Cash & equivalents + Short Term investments + Accounts receivable) = $11,420,000 - $4,310,460 = $7,109,540
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