Balance Sheet December 31st (Millions of dollars) Scramouche Pellegrini Southern

Question

Balance Sheet December 31st (Millions of dollars) Scramouche Pellegrini Southern Opera Company Corporation Scramouche Pellegrini Southern Company Corporation Opera Assets Current assets Liabilities Current liabilities Cash Accounts receivable Inventories $574 210 616 1,400 $0 127 $369 Accounts payable $0 135 Accruals 396 Notes payable 900 Total current liabilities Total current assets Net fixed assets Net plant and equipment 844 1,031 1,875 675 675 825 1,500 Long-terrt bonds 1,100 1,100 Total debt Common equity 325 175 500 2,000 Common stock 406 219 625 2,500 Retained earnings Total common equity Total liabilities and equity Total assets 2,500 2,000 ; Scramouche Opera Company's current Pellegrini Southern Corporation's current ratio is ratio is , and its quick ratio is , and its quick ratio is Note: Round your values to four decimal places

Explanation / Answer

Current ratio = Total current assets/Total current liabilities

Current ratio of Pellegrini Southern Corporation = $900 million/$675 million = 1.3333

Current ratio of Scramouche Opera Company = $1400 million/$844 million = 1.6588

Quick ratio = Quick assets/Total current liabilities

Quick assets = Current assets – Inventories

Quick ratio of Pellegrini Southern Corporation = ($900 million-$396 million)/$675 million = 0.7467

Quick ratio of Scramouche Opera Company = ($1400 million-$616 million)/$844 million = 9289

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