Business Studies, asked by Chahalsaab3134, 11 months ago

If a firm has $100 in inventories, a current ratio equal to 1.2, and a quick ratio equal to 1.1, what is the firm's net working capital?

Answers

Answered by Ambarsariya
0

Explanation:

each firm will face two market demand curves for its product. ... If the oligopolist increases its price above the equilibrium price P, it is assumed that the other oligopolists in the market will not follow with price increases of their own.

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Answered by PiaDeveau
6

Net working capital = $200

Explanation:

Given:

Inventory = $100

Current ratio = 1.2

Quick ratio = 1.1

Computation:

Current ratio = Current Assets / Current liabilities

1.2 = Current Assets / Current liabilities

Current Assets = 1.2 Current liabilities

Quick ratio = (Current Assets - Inventory) / Current liabilities

1.1 = (Current Assets -$100) / Current liabilities

1.1 Current liabilities = 1.2 Current liabilities -  $100

$100 = 0.1 Current liabilities

Current liabilities = $1,000

Current Assets = 1.2 ($1,000)

Current Assets = $1,200

Net working capital = Current Assets - Current liabilities

Net working capital = $1,200 - $1,000

Net working capital = $200

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