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Home / Questions / The Copper Grill has the following current assets: cash $12 million receivables $50

The Copper Grill has the following current assets: cash $12 million receivables $50

The Copper Grill has the following current assets: cash, $12 million; receivables, $50 million; inventory, $44 million; and other current assets $4 million. The Copper Grill has the following liabilities: accounts payable, $38 million; current portion of long-term debt, $7 million; and long-term debt, $12 million. Based on these amounts, calculate the current ratio and the acid-test ratio for The Copper Grill.

 

 

136. Selected financial data regarding current assets and current liabilities for two competing companies, Simon and Garfunkel, are provided as follows:

 

($ in millions)

Simon

Garfunkel

Current assets

 

 

Cash and cash equivalents

$648

$2,917

Short-term investments

3,676

 

Net receivables

  991

1,372

Inventory

515

202

Other current assets

334

476

Total current assets

$6,164

$4,967

Current liabilities

 

 

Accounts payable

$7,081

$4,295

Short-term debt

1,239

1,021

Other current liabilities

  

1,308

Total current liabilities

$8,320

$6,624

 

 

1.   Calculate the current ratio for Simon. Then calculate the current ratio for Garfunkel. Which of the two companies has the best current ratio?

2.   Calculate the acid-test (quick) ratio for Simon. Then calculate the acid-test (quick) ratio for Garfunkel. Which of the two companies has the best acid-test ratio?

Jan 27 2020 View more View Less

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