VU Answer Provide MGT201 GBD Solution Fall 2021. Easy to See Perfect MGT201 GDB Solution 2021 and Free to Download Solution Idea File.
MGT201 GDB SOLUTION FALL 2021
Provided by VU Answer
Due Date: 8 Dec 2021
Solution:
1.
The Benchmark of the company is 2/1
We should calculate the current ratio which is equal to = current assets / current liabilities
Where
Current Assets = Cash+ Inventory+ Accrued Receivables + Marketable
Securities
= 400,000 + 150,000 + 100,000 + 200,000
= 850,000
Current Liabilities = Account Payables + Short term debts + Accruals
= 100,000 + 150,000 + 250,000
= 500,000
Current Ratio = 850,000/500,000
Current Ratio = 1.7/1
It is lower than the benchmark
2.
If a company wants to pay off its short-term debts of Rs 20,000 we will deduct the value of Rs 200,000 from cash in Current assets and from short-term debts in current liabilities.
Current Assets = 850,000 + 200,000
= 650,000
Current Liabilities = 500,000 + 200,000
= 300,000
Now again calculate the value of Current Ratio
= 650,00/300,000
= 2.1/1
This is higher than the benchmark so the company should pay off its short-term debts.
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