unadjusted current ratio = 1.72 and does not include "50m of receivables with full recourse to a qualified SPE special purpose entity. adjusted current ratio —> adds 50m to numerator AND 50m to denominator? is that the correct way to adjust current ratio for SPE? regards, schweser sample exam, exam 3, morning, #13
don’t know if anybody cares, but I checked it, and SPE is added to numerator and denominator when adjusting the current ratio
Yes. If this were an account receivable with recourse - you would add back 50 million to Current Assets and add back 50 Mill to the Current Liabilities as well.