Balance Sheet

Question 1

What is the Current Ratio?

Answer 1

Current Assets / Current Liabilities
Ability to pay short term obligations- 1.5 or better is good

Question 2

What is Quick Ratio?

Answer 2

Current Assets - Inventories / Current Liabilities

Question 3

What are current assets

Answer 3

Cash, A/R (within 12 months), negotiable securities (easily sell to obtain cash), inventories

Question 4

What are current liabilities?

Answer 4

A/P, wages, interest within a year due on outstanding loans.

Question 5

What is owner’s equity?

Answer 5

all assets owned by shareholders minus any liabilities owed by the business

Question 6

What is debt ratio?

Answer 6

Total liabilities/Total assets

Question 7

What is working capital ratio?

Answer 7

Current assets - current liabilities

Question 8

What is the debt to equity ratio?

Answer 8

Total Liabilities / Total Shareholder Equity

Question 9

Public co’s Balance sheet must be prepared in accordance with?

Answer 9

GAAP

Question 10

Public co’s Financial statements must be filed regularly with

Answer 10

SEC