Creative Technologies Corp. has the following information:
Annual sales RM1,200,000
Current liabilities RM375,000
Days sales outstanding (DSO) (365-day year) 40
Inventory Turnover ratio 4.8
Current ratio 1.2
The company’s current assets consist of cash, inventories, and accounts receivable.
How much cash does the company have on its balance sheet?
1
Expert's answer
2016-02-15T00:00:56-0500
By definition, Current Ratio, DSO, ITR are:
Current Ratio = Current Assets / Current Liabilities therefore Current Assets = Current Liabilities * Current Ratio = RM375,000 * 1.2 = RM450,000
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That is really very helpful.... many thanks