Selected financial data regarding current assets and current liabilities for ACM

Question

Selected financial data regarding current assets and current liabilities for ACME Corporation and Wayne Enterprises, are as follows ACME Corporation Enterprises Wayne ($ in millions) Current assets Cash and cash equivalents Current investments Net receivables Inventory Other current assets $ 519 7 618 10,645 1,251 185 461 106 7,609 155 Total current assets $13,040 $ 8,516 Current liabilities Current debt Accounts payable and accrued liabilities Other current liabilities $ 7,621 1,707 1,148 $4,464 961 2,552 Total current liabilities $10,476 $7,977 Required: 1-a. Calculate the current ratio for ACME Corporation and Wayne Enterprises. (Enter your answers in millions (i.e., $5,500,000 should be entered as 5.5).) Current Ratio ACME Corporation Wayne Enterprises 2-a. Calculate the acid-test (quick) ratio for ACME Corporation and Wayne Enterprises. (Enter your answers in millions. (i.e., $5,500,000 should be entered as 5.5.)) Acid-Test Ratio ACME Corporation Wayne Enterprises

Explanation / Answer

1-a) Current Ratio Acme Corporation Wayne Enterprises Current assets 13,040 = 1.24 8,516 = 1.07 current liabilities 10476 7,977 1-b) Acid test ration Acme Corporation Wayne Enterprises (current assets-inventory-other current assets) 1,144 = 0.11 752 = 0.09 current liabilities 10476 7,977 assuming other current assets does not include liquid assets

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