Balance Sheet December 31st (Millions of dollars) ding Pellegrini Foodstuffs Sou

Question

Balance Sheet December 31st (Millions of dollars) ding Pellegrini Foodstuffs Southern ding Pellegrini Foodstuffs Southern Inc. Inc. Inc. Inc. Assets Liabilities Current liabilities Current assets $1,722 $1,107 ccounts payable Cash Accounts receivable Inventories Total current assets Net fixed assets Net plant and equipment $0 630 1,848 4,200 405 Accruals 1,188 Notes payable 2,700 Total current liabilities 2,151 2,531 3,094 5,625 2,025 2,025 2,475 Long-term bonds 3,300 3,300 Total debt Common equity Common stock Retained earnings 975 525 Total common equity Total liabilities and equity 1,875 7,500 Total assets 7,500 6,000 6,000 Pellegrini Southern Inc.'s quick ratio is , and its current ratio is ; Jing Foodstuffs Inc.'s quick ratio is , and its current ratio is Which of the following statomant n t

Explanation / Answer

Jing Foodstuffs, Inc.:

Current Ratio = Current Assets / Current Liabilities
Current Ratio = $4,200 / $2,531
Current Ratio = 1.66

Quick Ratio = (Cash + Accounts Receivable) / Current Liabilities
Quick Ratio = ($1,722 + $630) / $2,531
Quick Ratio = 0.93

Pellegrini Sourthern Inc.:

Current Ratio = Current Assets / Current Liabilities
Current Ratio = $2,700 / $2,025
Current Ratio = 1.33

Quick Ratio = (Cash + Accounts Receivable) / Current Liabilities
Quick Ratio = ($1,107 + $405) / $2,025
Quick Ratio = 0.75

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