Luther Corporation Consolidated Balance Sheet December 31, 2006 and 2005 (in $ m
ID: 2815081 • Letter: L
Question
Luther Corporation
Consolidated Balance Sheet
December 31, 2006 and 2005 (in $ millions)
Assets
2006
2005
Liabilities and
Stockholders' Equity
2006
2005
Current Assets
Current Liabilities
Cash
63.863.8
58.5
Accounts payable
87.287.2
73.5
Accounts receivable
55.755.7
39.6
Notes payable /
shortminusterm
9.89.8
9.6
Inventories
44.744.7
42.9
Current maturities of
longminusterm
37.437.4
36.9
Other current assets
5.55.5
3.0
Other current liabilities
6.0
12.0
Total current assets
169.7169.7
144.0
Total current liabilities
140.4140.4
132.0
LongminusTerm
LongminusTerm
Land
64.664.6
62.1
Longminusterm
239.7239.7
168.9
Buildings
107.2107.2
91.5
Capital lease obligations
Equipment
120.3120.3
99.6
Less accumulated
depreciation
(55.455.4 )
(52.5)
Deferred taxes
22.8
22.2
Net property, plant, and
equipment
236.7236.7
200.7
longminusterm
minusminusminus
minusminusminus
Goodwill
60.0
minusminus
longminusterm
262.5262.5
191.1
longminusterm
63.0
42.0
Total liabilities
402.9402.9
323.1
longminusterm
359.7359.7
242.7
Stockholders' Equity
126.5126.5
63.6
Total Assets
529.4529.4
386.7
Total liabilities and
Stockholders' Equity
529.4529.4
386.7
Refer to the balance sheet above. Luther's current ratio for 2006 is closest to:
A.
1.811.81
B.
2.422.42
C.
0.60.6
D.
1.211.21
Assets
2006
2005
Liabilities and
Stockholders' Equity
2006
2005
Current Assets
Current Liabilities
Cash
63.863.8
58.5
Accounts payable
87.287.2
73.5
Accounts receivable
55.755.7
39.6
Notes payable /
shortminusterm
debt9.89.8
9.6
Inventories
44.744.7
42.9
Current maturities of
longminusterm
debt37.437.4
36.9
Other current assets
5.55.5
3.0
Other current liabilities
6.0
12.0
Total current assets
169.7169.7
144.0
Total current liabilities
140.4140.4
132.0
LongminusTerm
AssetsLongminusTerm
LiabilitiesLand
64.664.6
62.1
Longminusterm
debt239.7239.7
168.9
Buildings
107.2107.2
91.5
Capital lease obligations
Equipment
120.3120.3
99.6
Less accumulated
depreciation
(55.455.4 )
(52.5)
Deferred taxes
22.8
22.2
Net property, plant, and
equipment
236.7236.7
200.7
Otherlongminusterm
liabilitiesminusminusminus
minusminusminus
Goodwill
60.0
minusminus
Totallongminusterm
liabilities262.5262.5
191.1
Otherlongminusterm
assets63.0
42.0
Total liabilities
402.9402.9
323.1
Totallongminusterm
assets359.7359.7
242.7
Stockholders' Equity
126.5126.5
63.6
Total Assets
529.4529.4
386.7
Total liabilities and
Stockholders' Equity
529.4529.4
386.7
Explanation / Answer
Answer is D. 1.21
Current ratio is an indicator of company's liquidity position.
Mathematically, current ratio = current assets/current liabilities
Current ratio = 169.7/140.4 = 1.21
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