Math Snap

STEP 1

Assumptions1. The net working capital is $,630. The current liabilities are $5,9703. The inventory is $3,860

STEP 2

First, we need to find the current assets. We can do this by adding the net working capital to the current liabilities.
$$Current\, assets = Net\, working\, capital + Current\, liabilities$$

STEP 3

Now, plug in the given values for the net working capital and current liabilities to calculate the current assets.
Current\, assets = \($\)2,630 + \($\)5,970

STEP 4

Calculate the current assets.
Current\, assets = \($\)2,630 + \($\),970 = \($\)8,600

STEP 5

Now that we have the current assets, we can find the current ratio. The current ratio is calculated by dividing the current assets by the current liabilities.
$$Current\, ratio = Current\, assets / Current\, liabilities$$

STEP 6

Plug in the values for the current assets and the current liabilities to calculate the current ratio.
Current\, ratio = \($\)8,600 / \($\)5,970

STEP 7

Calculate the current ratio.
Current\, ratio = \($\),600 / \($\)5,970 =1.44\, times

STEP 8

Now that we have the current ratio, we can find the quick ratio. The quick ratio is calculated by subtracting inventory from current assets and then dividing by current liabilities.
$$Quick\, ratio = (Current\, assets - Inventory) / Current\, liabilities$$

STEP 9

Plug in the values for the current assets, inventory, and current liabilities to calculate the quick ratio.
Quick\, ratio = (\($\)8,600 - \($\)3,860) / \($\)5,970

Calculate the quick ratio.
Quick\, ratio = (\($\)8,600 - \($\)3,860) / \($\)5,970 =0.79\, timesThe current ratio is.44 times and the quick ratio is0.79 times.