Financial Reporting and Analysis Q184
184The following selected balance sheet and ratio data are available for a company:
| Metric | 2012 | 2011 |
| Cash and cash equivalents | 90.0 | |
| Marketable securities | 350.5 | |
| Accounts receivables | 10.0 | |
| Other current assets | 120.1 | |
| Total current assets | 570.6 | |
| Deferred revenues | 75.0 | |
| Other current liabilities | 112.5 | |
| Total current liabilities | 187.5 | |
| Cash ratio | 2.15 | |
| Quick ratio | 2.70 | |
| Current ratio | 2.89 |
Which of the following ratios decreased between 2011 and 2012?
- Option : C
- Explanation : Cash ratio = (Cash + Marketable securities) / (Current liabilities) = (90 + 350.5) / 187.5 = 2.3 Current ratio = (Current assets) / (Current liabilities) = 570.6 / 187.5 = 3.0 Quick ratio = (Cash + Marketable securities + Accounts receivables) / (Current liabilities) = (90 + 350.5 + 10) / 187.5 = 2.4 Between 2011 and 2012 the quick ratio declined while the other two ratios increased.
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