Quote:
| Originally Posted by 581043
(Cash + Short Term Investments + Receivables (net) ) / Current Liabilities
My question is the following: I would like for someone to tell me: Are the components for the acid-test found only in current assets? |
Yes. The equation is actually quick assets/current liabilities, with quick assets being cash, marketable securities and receivables. The idea is only including things that are cash or can be converted to cash fairly quickly. They would pretty much have to be current assets to even fit that definition. It's a sub-set of current assets.
In your list, you have no marketable securities. I'm not sure what the receivable from Cargill thing is. (Though I did some temporary for Cargill once, but I don't think that helps you.
) It's listed in current. There must be something "special" about it for them to list it separately from their other receivables. There might be something in the disclosure notes about it. But for the sake of a class situation and not really being able to expect a student to necessarily know a thing like that, I think I'd go ahead and include it. But that definitely is just an opinion.
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