The most appropriate ratio to determine if a company has enough short-term assets to cover its short-term liabilities is the Current Ratio.

1. Formula: Current Ratio = Total Current Assets / Total Current Liabilities.
2. Calculation:

• Total Current Assets = $137,605
• Total Current Liabilities = $106,220
• Ratio = $137,605 / $106,220 = 1.30 (rounded to two decimal places).

This ratio of 1.30 (or 1.30:1) signifies that Coffee Time has $1.30 in current assets for every $1.00 of current liabilities. Since this value is greater than 1.0, it indicates the company does appear to have enough current assets to cover its short-term liabilities.

Massachusetts Institute of Technology (MIT) OpenCourseWare. (2016). Firm Evaluation & Financial Statement Analysis. Lecture 5 Slides. MIT11_437F16_Lec5.pdf.

Reference: Page 7, Section "Shortterm Liquidity and Cash Needs."

Content: Defines the Current Ratio as: "Current Assets/Current Liabilities."

Birla Institute of Technology and Science (BITS), Pilani. (n.d.). Ratio Analysis. Courseware document.

Reference: Page 1, Section "Liquidity ratios."

Content: Defines the Current Ratio as the relationship between current assets and current liabilities (Current Assets / Current Liabilities). It states, "A relatively high current ratio is an indication that the firm is liquid and has the ability to pay its current obligations in time..."

Kasmir. (2014). The Effect of Current Ratio and Debt to Asset Ratio on Net Profit Margin and Stock Prices. As cited in Jurnal APLIKASI MANAJEMEN, Vol 12, No. 4.

Reference: Page 714 (as referenced in the 2014 journal).

Content: Defines the Current Ratio (CR) as "a measuring tool to see the company's ability to meet its current liabilities that are due." This confirms the ratio's purpose in assessing the coverage of liabilities. (DOI: http://dx.doi.org/10.18202/jam23026332.12.4.11)

Supplier selection is a systematic process to identify the supplier offering the best overall value, not just the lowest price. It begins with appraising potential suppliers' capabilities, financial health, and compliance using tools like Pre-Qualification Questionnaires (PQQs). Formal bids are then solicited and evaluated against a balanced scorecard of criteria, such as quality, delivery performance, technical capability, and sustainability. This multi-criteria analysis ensures the chosen supplier is reliable, capable, and strategically aligned with the buying organization's objectives. Due diligence activities like site visits and reference checks are often conducted to verify claims before a final decision and contract award are made.

1. Lysons

K.

& Farrington

B. (2020). Procurement and Supply Chain Management (10th ed.). Pearson. (Chapter 10

"Sourcing

" details the stages of supplier appraisal

information gathering via RFIs/RFQs

and the evaluation process).

2. Monczka

R. M.

Handfield

R. B.

Giunipero

L. C.

& Patterson

J. L. (2016). Purchasing and Supply Management (6th ed.). McGraw-Hill Education. (Chapter 8

"Supplier Evaluation and Selection

" pp. 254-285

outlines the step-by-step process

including identifying criteria

developing evaluation tools like weighted-point models

and conducting site visits).

3. CIPS. (2018). CIPS Global Standard for Procurement and Supply. Chartered Institute of Procurement & Supply. (Theme 4: Sourcing and Contract Management

Competency L4-4.2

"Supplier Selection

" specifies the requirement to use defined criteria and processes to select suppliers).

4. Van Weele

A. J. (2018). Purchasing and Supply Chain Management (7th ed.). Cengage Learning. (Chapter 8

"The Sourcing Process

" describes the supplier selection funnel from initial long-listing to final contract negotiation and award).

The Kraljic portfolio matrix is a strategic tool used to segment an organization's purchases or suppliers into four categories based on two key dimensions: profit impact and supply risk.

1. Strategic Items (High Profit Impact, High Supply Risk): These are critical to the business and have a high supply risk. The focus is on forming long-term, collaborative partnerships.

2. Leverage Items (High Profit Impact, Low Supply Risk): These items represent a large portion of expenditure but are sourced from a competitive market. The strategy is to leverage purchasing power through negotiation.

3. Bottleneck Items (Low Profit Impact, High Supply Risk): These have a low financial impact but a high supply risk. The primary goal is to ensure supply continuity.

4. Non-critical Items (Low Profit Impact, Low Supply Risk): These are easy to purchase and have a low business impact. The focus is on process efficiency and automation.

1. Kraljic

P. (1983). Purchasing Must Become Supply Management. Harvard Business Review

61(5)

109–117. The matrix and its four quadrants are introduced and detailed on pages 111-112.

2. Van Weele

A. J. (2018). Purchasing and Supply Chain Management (7th ed.). Cengage Learning. The Kraljic matrix is explained in Chapter 5

Section 5.4.2

"The purchasing portfolio matrix of Kraljic."

3. Gelderman

C. J.

& Van Weele

A. J. (2003). Handling measurement issues and strategic directions in Kraljic's purchasing portfolio model. Journal of Purchasing & Supply Management

9(5-6)

207-216. The four quadrants are described as the core of the model on page 208. https://doi.org/10.1016/j.pursup.2003.07.001

4. Kamann

D. J. F.

& van der Vaart

T. (2004). The Strategic Role of External Resources. In: The Blackwell Encyclopedia of Management. Wiley. The entry on the Kraljic Matrix explicitly defines the four quadrants: routine (non-critical)

leverage

bottleneck

and strategic.

The scenario described perfectly matches the Incoterm EXW (Ex Works). Under EXW, the seller fulfills their delivery obligation by making the goods available at their own premises, such as a factory or warehouse. The seller is not responsible for loading the goods onto the buyer's transport or for clearing the goods for export. All subsequent risks and costs, including loading, transportation, and customs clearance, are borne by the buyer from the moment the goods are placed at their disposal. This term represents the minimum obligation for the seller and the maximum obligation for the buyer.

FCA – Free Carrier: This is incorrect because under FCA, the seller is responsible for arranging and clearing the goods for export, which contradicts the scenario.

CPT – Carriage Paid To: This is incorrect as the seller must contract and pay for the carriage of the goods to a named destination, a responsibility not mentioned for the supplier.

CIP – Carriage and Insurance Paid to: This is incorrect because the seller must arrange and pay for both carriage and insurance to the named destination, which goes beyond the described supplier duties.

1. International Chamber of Commerce. (2019). Incoterms® 2020: ICC rules for the use of domestic and international trade terms. ICC Publication No. 723E. In the section "EXW | Ex Works

" the guidance notes state

"The seller does not need to load the goods on any collecting vehicle

nor does it need to clear the goods for export... The buyer bears all costs and risks involved in taking the goods from the seller’s premises to the desired destination." (p. 27-31).

2. David

P. (2020). International Logistics: The Management of International Trade Operations (5th ed.). In Chapter 5

the text clarifies the EXW term: "The Ex-Works Incoterm rule requires the exporter to make the goods available to the buyer at the exporter’s own premises... The exporter is not responsible for loading the goods on the truck or for clearing the goods for export." (p. 124).

3. Institute of Export & International Trade. (n.d.). Incoterms Rules 2020 - EXW. [University/Professional Body Courseware]. The guide specifies for EXW: "The seller has no obligation to load the goods... The buyer must carry out all export and import clearance formalities." This aligns directly with the question's parameters.

The scenario describes the Incoterm® 'Delivered At Terminal' (DAT) from the 2010 rules. Under DAT, the seller is responsible for all costs and risks associated with bringing the goods to a named terminal (such as a port, airport, or warehouse) at the destination. Crucially, this responsibility includes unloading the goods from the arriving means of transport. The risk transfers from the seller to the buyer only after the goods have been successfully unloaded at this terminal. This is the only Incoterm among the options where the seller has the obligation to unload at the destination.

B. DAP – Delivered At Place: The seller delivers the goods ready for unloading at the named place, but the buyer is responsible for the risk and cost of unloading.

C. DDP – Delivered Duty Paid: Similar to DAP, the seller is not responsible for unloading the goods at the destination, although they do cover all costs including import duties.

D. FAS – Free Alongside Ship: Risk transfers from seller to buyer at the port of shipment (origin), not the destination, once the goods are placed alongside the vessel.

1. International Chamber of Commerce. (2010). Incoterms® 2010: ICC rules for the use of domestic and international trade terms. ICC Publication No. 715E.

The official definition for DAT states: "the seller delivers when the goods

once unloaded from the arriving means of transport

are placed at the disposal of the buyer at a named terminal at the named port or place of destination." This directly matches the question's description.

2. Lysons

K.

& Farrington

B. (2020). Procurement and Supply Chain Management (10th ed.). Pearson.

In Chapter 14

"Logistics in the Supply Chain

" the text explains the various Incoterms. It clarifies that under DAT (Incoterms 2010)

the seller's obligations include unloading at the destination terminal

distinguishing it from DAP where unloading is the buyer's responsibility.

3. David

P. (2015). International Logistics: The Management of International Trade Operations (4th ed.). Cicero Books.

In Chapter 4

"International Terms of Trade

" the author details the responsibilities under each Incoterm. For DAT

it is specified on page 104 that "The seller is responsible for the cost of unloading the goods from the carrier." This confirms the key element described in the question.

The scenario describes the seller's responsibility ending and the buyer's risk beginning at the precise moment the goods are loaded on board the vessel at the port of shipment. This is the specific definition of the Free On Board (FOB) Incoterm. Under FOB, the seller fulfills their delivery obligation when the goods are on the vessel, and the risk of loss or damage transfers to the buyer at that same point. This term is designated for sea and inland waterway transport.

B. DAP – Cost and Freight: This is not a valid Incoterm. It appears to be a conflation of 'Delivered at Place' (DAP) and 'Cost and Freight' (CFR).

C. CIF – Cost Insurance and Freight: While risk also transfers when goods are on board the vessel, CIF additionally requires the seller to procure and pay for insurance, an obligation not mentioned in the question.

D. FAS – Free Alongside Ship: Under FAS, risk transfers when the goods are placed alongside the vessel (e.g., on the quay), not once they are loaded on board.

1. International Chamber of Commerce (ICC). (2019). Incoterms® 2020: ICC rules for the use of domestic and international trade terms. ICC Publication No. 723E.

FOB (Free On Board) A2/B2 Delivery/Taking Delivery & A3/B3 Transfer of Risks: The guide specifies that the seller delivers the goods by placing them on board the vessel nominated by the buyer. The risk of loss or damage transfers from the seller to the buyer at this exact point. This directly confirms option A.

FAS (Free Alongside Ship) A3/B3 Transfer of Risks: The rules state that risk transfers when the goods are placed alongside the vessel

which contradicts the scenario.

CIF (Cost Insurance and Freight) A2/B2 & A3/B3: The risk transfer point is the same as FOB (on board the vessel)

but the seller also has the A5 obligation to contract for insurance cover against the buyer's risk. The question's scope is limited to delivery and risk transfer

making FOB the most precise answer.

2. Cornell Law School Legal Information Institute (LII). (n.d.). Free on Board (FOB). Wex Legal Dictionary / Encyclopedia.

"Under the Incoterms 2020 rules

FOB means the seller has fulfilled its obligation when the goods are loaded on board the vessel nominated by the buyer at the named port of shipment. The risk of loss or damage is transferred to the buyer once the products are on board the ship." This academic legal resource corroborates the definition and risk transfer point described in the question.

3. CIPS. (2018). Procurement and Supply in Practice (L4M8 CIPS Level 4 Diploma in Procurement and Supply Study Guide). Profex Publishing Limited.

Chapter 5: Sourcing

Section on Incoterms: The official CIPS study materials define FOB in line with the ICC rules

stating that the seller is responsible for placing the goods on board the ship nominated by the buyer

at which point risk passes to the buyer. This aligns directly with the scenario presented.

The Incoterm DDP (Delivered Duty Paid) places the maximum obligation on the seller. Under DDP, the seller is responsible for delivering the goods to the named destination in the buyer's country. This responsibility includes all costs and risks, such as transportation, insurance, and crucially, clearing the goods for import, which involves paying any applicable duties and taxes. The risk only transfers to the buyer once the goods have arrived at the destination (e.g., the buyer's premises) and are ready for unloading. This perfectly matches the scenario described in the question.

A. DAT – Delivered At Terminal: The seller's responsibility ends once goods are unloaded at a named terminal, and the buyer handles import customs clearance. (Note: DAT was replaced by DPU in Incoterms 2020).

B. DAP – Delivered At Place: The seller delivers to the named place, but the buyer is responsible for import customs clearance and paying any duties.

D. FAS – Free Alongside Ship: This is a sea freight term where the seller's responsibility ends once goods are placed alongside the vessel at the port of origin.

1. International Chamber of Commerce (ICC). (2019). Incoterms® 2020: ICC rules for the use of domestic and international trade terms. ICC Publication No. 723E. The official text for DDP (Delivered Duty Paid) states

"the seller delivers the goods when the goods are placed at the disposal of the buyer

cleared for import... at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import

to pay any duty for both export and import and to carry out all customs formalities." (Guidance Note

DDP).

2. Goldsby

T. J.

& Iyengar

D. (2021). The Definitive Guide to Transportation: Principles

Strategies

and Decisions for the Effective Flow of Goods and Services. Pearson FT Press. Chapter 11

"International Transportation

" explains that DDP represents the highest level of service and obligation for the seller

as they are responsible for all activities

including import clearance and duty payment

until the goods reach the buyer's designated location.

3. University of Tennessee

Knoxville. Haslam College of Business

Global Supply Chain Institute. (2020). Incoterms 2020: A GSCI White Paper. This paper clarifies the division of responsibilities. On page 11

it specifies that under DDP

the seller is responsible for "Import clearance & duties

" distinguishing it from DAP where this responsibility falls to the buyer.

The scenario described aligns perfectly with the Incoterm® CIP (Carriage and Insurance Paid to). Under CIP, the seller is responsible for delivering the goods to a carrier they have nominated. The seller must also contract for and pay the cost of carriage to the named destination. Crucially, the seller is also obligated to contract for insurance cover against the buyer's risk of loss or damage during transit. The rule specifies that the seller must obtain, at their own expense, cargo insurance compliant with at least the minimum cover provided by Clauses (C) of the Institute Cargo Clauses, which matches the "minimal insurance cover" mentioned in the question. Risk transfers from the seller to the buyer when the goods are delivered to the first carrier.

A. EXW – Ex Works: The seller's only obligation is to make goods available at their premises; they do not arrange transport or insurance.

B. FCA – Free Carrier: The seller delivers to the carrier but has no obligation to arrange or pay for insurance for the main carriage.

C. CPT – Carriage Paid To: The seller pays for carriage to the destination but has no obligation to arrange or pay for insurance.

1. International Chamber of Commerce (ICC). Incoterms® 2020: ICC rules for the use of domestic and international trade terms. ICC Publication

2019.

CIP (Carriage and Insurance Paid to)

Section A5 (Insurance): "The seller must obtain

at its own cost

cargo insurance... The insurance shall cover the goods from the point of delivery... to at least the named place of destination... The cover shall be for at least the minimum cover provided by the Institute Cargo Clauses (C)..." (p. 67).

CPT (Carriage Paid To)

Section A5 (Insurance): "The seller has no obligation to the buyer to make a contract of insurance." (p. 57). This directly contrasts with the question's requirement.

2. David

P.

& Stewart

R. (2010). International Logistics: The Management of International Trade Operations (3rd ed.). Cengage Learning.

Chapter 4

International Terms of Trade: "Under CIP

the seller is responsible for the cost of transportation and the cost of insurance to the named destination. This is the only other Incoterm rule [besides CIF] that stipulates that the seller must purchase insurance." (p. 114).

3. University of North Carolina

Kenan-Flagler Business School. Global Business Projects: Incoterms® 2020 Rules.

In its summary of CIP

it states: "Seller pays for carriage and insurance to the named destination point

but risk passes when the goods are handed over to the first carrier." This confirms the dual responsibility for cost (carriage and insurance) and the point of risk transfer described in the question.

The scenario describes the Free Alongside Ship (FAS) Incoterm. Under FAS, the seller's obligation is fulfilled when the goods are placed alongside the vessel nominated by the buyer at the named port of shipment (e.g., on a quay or in a barge). The key element is the transfer of risk and cost from the seller to the buyer at the moment the goods are alongside the ship, before they are loaded. The buyer is then responsible for all subsequent costs, including loading, main carriage, and import clearance.

A. DAT – Delivered At Terminal: This term (replaced by DPU in Incoterms 2020) requires the seller to deliver and unload the goods at a named terminal at the destination.

B. DAP – Delivered At Place: The seller is responsible for delivery to a named destination, where the goods are ready for unloading; risk transfers at this destination point.

C. DDP – Delivery Duty Paid: This places maximum obligation on the seller, who is responsible for delivering the goods to the destination, cleared for import and with all duties paid.

1. CIPS L4M8 Procurement and Supply in Practice Study Guide. (2018). Profex Publishing Limited. Chapter 5: Sourcing

Section 5.5 International Sourcing

pp. 158-159. The guide defines FAS as: "The seller delivers when the goods are placed alongside the vessel... at the named port of shipment. The risk of loss of or damage to the goods passes when the goods are alongside the ship."

2. International Chamber of Commerce (ICC). (2019). Incoterms® 2020: ICC rules for the use of domestic and international trade terms. ICC Publication No. 723E. Rule A2/B2 for FAS explicitly states

"The seller delivers the goods... when the goods are placed alongside the vessel... at the named port of shipment... The risk of loss of or damage to the goods transfers from the seller to the buyer when the goods are alongside the ship."

3. David

P.

& Stewart

R. (2010). International Logistics: The Management of International Trade Operations. 3rd ed. Cengage Learning. Chapter 6: Terms of Trade

p. 184. The text clarifies that under FAS

"The exporter is responsible for clearing the goods for export and placing them alongside the ship... The importer is responsible for the cost of loading the goods onto the ship."

The scenario describes the Free Carrier (FCA) Incoterm. Under FCA, the seller is responsible for delivering the goods, cleared for export, to a carrier nominated by the buyer at a specified location (e.g., the seller's premises or a transport terminal). The critical point, as stated in the question, is that the risk of loss or damage transfers from the seller to the buyer as soon as the goods are in the custody of the buyer's chosen carrier. This term offers flexibility as the named place of delivery can be the seller's own location or another point.

A. EXW – Ex Works: The seller's only obligation is to make the goods available at their own premises; the buyer arranges and pays for all transport and bears all risk from that point.

C. CPT – Carriage Paid To: The seller chooses and pays for the carrier to a named destination, which contradicts the buyer choosing the carrier as stated in the scenario.

D. CIP – Carriage and Insurance Paid to: Similar to CPT, the seller arranges and pays for the carrier and also procures insurance, which is not mentioned and contradicts the buyer's role.

1. International Chamber of Commerce (ICC). Incoterms® 2020: ICC rules for the use of domestic and international trade terms. ICC Publication No. 723E

2019. The rule for FCA (Free Carrier) states

"The seller delivers the goods to the carrier...nominated by the buyer...Risk passes from seller to buyer when the goods are delivered to the carrier nominated by the buyer" (Guidance Note

FCA

pp. 30-31).

2. Ramberg

J. ICC Guide to Incoterms® 2010. ICC Publication No. 720E

2011. (While for the 2010 version

the core principle of FCA remains consistent with the 2020 rules). The guide explains that under FCA

"the seller fulfils his obligation to deliver when he has handed over the goods

cleared for export

into the charge of the carrier named by the buyer at the named place or point" (p. 124).

3. Michigan State University

International Business Center. "Incoterms® 2020." globalEDGE. This educational resource outlines the responsibilities for each term. For FCA

it specifies that risk transfer occurs "When the goods are delivered to the buyer's nominated carrier at the named place." This confirms the buyer's role in selecting the carrier and the precise point of risk transfer.