上一主题:Mistake in Schweser Alternative investments?
下一主题:FRA Taxes - It can't get anymore complicated than this
返回列表 发帖

Selling receivables ratio adjustments

In Schwesser concept checkers for Long-Term Liabs. and Leases question 16 states

"For a company that has sold recievables but retained the credit risk, which of the following is least likely to require adjustment by an anlyst?"
A. Current Ratio
B. Inventory Turnover
C. Debt-to-Equity

The answer is B, which i understand, I also understand that the recievable turnover and debt-to-equity need to be adjusted. But i do not understand why the current ratio needs to be adjusted.

If you have $10K cash and $10K in rec. and $15K in current liabilities your current ratio is 1.33. (10K+10K/15K) If you sell your $10K in recievables for $10K in cash you will still have the same curent ratio. $20K cash/$15K current liabs.

返回列表
上一主题:Mistake in Schweser Alternative investments?
下一主题:FRA Taxes - It can't get anymore complicated than this