Mathematics · Accounting Ratios
Mouse Co. has a current ratio of 1.6:1. Inventory represents 30% of its current assets. Mouse Co. has no positive cash balances but does have a bank overdraft. If it sells half of its inventory for cash at a mark-up of 100% and uses the entire proceeds to reduce its overdraft, what will its new current ratio be (rounded to two decimal places)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 12.62:1✓
- 21.88:1
- 31.60:1
- 42.14:1
Correct answer
2.62:1
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