The Copper Grill has the following current assets: cash, $12 million; receivables, $50 million; inventory, $44 million; and other current assets $4 million. The Copper Grill has the following liabilities: accounts payable, $38 million; current portion of long-term debt, $7 million; and long-term debt, $12 million. Based on these amounts, calculate the current ratio and the acid-test ratio for The Copper Grill.
What will be an ideal response?
($ in millions)
| Current Assets | ÷ | Current Liabilities | = | Current Ratio |
| ($12 + 50 + 44 + 4) | ÷ | ($38 + 7) | = | 2.44 (rounded) |
| Quick Assets | ÷ | Current Liabilities | = | Acid-Test Ratio |
| ($12 + 50) | ÷ | ($38 + 7) | = | 1.38 (rounded) |
Business
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