Liquidity ratio Josh Smith has compiled some of his personal financial data in order to determine his liquidity position. The data are as follows:
|
Account
|
Amount
|
|
Cash
|
$ $3,200
|
|
Marketable securities
|
1,000
|
|
Checking account
|
800
|
|
Credit card payables
|
1,200
|
|
?Short-term notes payable
|
900
|
a. Calculate Josh's liquidity ratio.
b. Several of Josh's friends have told him that they have liquidity ratios of about 1.8.
How would you analyze Josh's liquidity relative to his friends? Josh's liquidity ratio is ________ .
(Round to two decimal? places.)
PLEASE ANSWER BOTH QUESTIONS