Homework SourseExercise 855 Ratio Analysis If required round your answers t
Exercise 8-55
Ratio Analysis
If required, round your answers to two decimal places.
1. Calculate the following:
| a. | Current ratio | |
| b. | Quick ratio | |
| c. | Cash ratio | |
| d. | Operating cash flow ratio |
Solution
Answers
Current Assets
Cash & Equivalents
$ 6,598,000,000.00
Marketable Securities
$ 3,404,000,000.00
Receivables
$ 2,709,000,000.00
Inventories
$ 4,314,000,000.00
Other current Assets
$ 2,146,000,000.00
Total Current Assets
$ 19,171,000,000.00
Quick Assets
Cash & Equivalents
$ 6,598,000,000.00
Marketable Securities
$ 3,404,000,000.00
Receivables
$ 2,709,000,000.00
Other current Assets
$ 2,146,000,000.00
Total Quick Assets
$ 14,857,000,000.00
Requirement
Numerator
/
Denominator
=
Ratio
a
Current Ratio
Current Assets
/
Current Liabilities
=
Current Ratio
$ 19,171,000,000.00
/
$ 8,514,000,000.00
=
2.25
b
Quick Ratio
Quick Current Assets
/
Current Liabilities
=
Quick Ratio
$ 14,857,000,000.00
/
$ 8,514,000,000.00
=
1.75
c
Cash Ratio
Cash & Cash Equivalent
/
Current Liabilities
=
Cash ratio
$ 6,598,000,000.00
/
$ 8,514,000,000.00
=
0.77
d
Operating Cash Flow Ratio
Cash flows from Operating Activities
/
Current Liabilities
=
Operating Cash Flow Ratio
$ 10,620,000,000.00
/
$ 8,514,000,000.00
=
1.25
| Current Assets | |
| Cash & Equivalents | $ 6,598,000,000.00 |
| Marketable Securities | $ 3,404,000,000.00 |
| Receivables | $ 2,709,000,000.00 |
| Inventories | $ 4,314,000,000.00 |
| Other current Assets | $ 2,146,000,000.00 |
| Total Current Assets | $ 19,171,000,000.00 |
| Quick Assets | |
| Cash & Equivalents | $ 6,598,000,000.00 |
| Marketable Securities | $ 3,404,000,000.00 |
| Receivables | $ 2,709,000,000.00 |
| Other current Assets | $ 2,146,000,000.00 |
| Total Quick Assets | $ 14,857,000,000.00 |
