The Kroger Company is one of the world’s largest supermarket chains. These selec
ID: 2554347 • Letter: T
Question
The Kroger Company is one of the world’s largest supermarket chains. These selected items were adapted from Kroger's balance sheet as of January 30, 2016. (Dollar amounts are in millions.)
Cash (including temporary investments and deposit-in-transit) $ 1,200
Receivables 1,734
Merchandise inventories 7,368
Other current assets 790
Property, plant and equipment (net of depreciation) 19,619
Retained earnings 14,011
Total current liabilities 12,971
a.Total current assets _________ million
Total quick assets _________ million
b-1.Current ratio ____________ to 1
b-2.Quick ratio ____________ to 1
b-3.Working capital ____________ million
Explanation / Answer
Total current assets
= Cash + Receivables + Merchandise inventories + Other current assets
= $ 1,200 + $ 1,734 + $ 7,368 + $ 790
= $11,092 million
Total quick assets
= Total current assets - Merchandise inventories – Prepaid expenses
= $11,092 million - $ 7,368 million
= $3,724 million
Current ratio
= Current assets / Current liabilities
= $11,092 million / $12,971 million
= 0.85 to 1
Quick ratio
= Quick Assets / Current liabilities
= $3,724 million / $12,971 million
= 0.29 to 1
Working capital
= Current assets – Current liabilities
= $11,092 million - $12,971 million
= - $1,879 million
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