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1. Calculating Liquidity Ratios. SDJ, Inc., has net working capital of $1,410, current liabilities of $5,810, and inventory of $1,315. What is the current ratio? What is the quick ratio?
NWC = 1,410 = Current Assets – Current Liabilities = CA - 5,810
=> CA = 1,410 + 5810 = 7,220
Current Ratio = Current Assets/Current Liabilities
= 7,220/ 5,810 = 1.24
Quick Ratio = (Current Assets – Inventory) / Current Liabilities
= (7,220 – 1,315)/ 5,810 = 1.02...
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