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2020 2019 Quick Ratio Did the company's ability to pay its current liabilities improve over the two years? Los Altos, Inc. Income Statement

2020 2019 Quick Ratio Did the company's ability to pay its current liabilities improve over the two years? Los Altos, Inc. Income Statement

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Los Altos, Inc. Financial Analysis** **Quick Ratio:** - 2020: 0 - 2019: 0 --- **Income Statement (For Years Ended December 31, 2020 and 2019)** - **Net Sales:** - 2020: $10,000 million - 2019: $9,500 million - **Cost of Goods Sold:** - 2020: $5,500 million - 2019: $5,200 million - **Gross Profit:** - 2020: $4,500 million - 2019: $4,300 million - **Selling and Administrative Expenses:** - 2020: $2,800 million - 2019: $2,700 million - **Income from Operations:** - 2020: $1,700 million - 2019: $1,600 million - **Interest Expense:** - 2020: $300 million - 2019: $250 million - **Income Before Income Taxes:** - 2020: $1,400 million - 2019: $1,350 million - **Income Tax Expense:** - 2020: $420 million - 2019: $400 million - **Net Income:** - 2020: $980 million - 2019: $950 million --- **Balance Sheet (December 31, 2020 and 2019)** **Assets:** - **Current Assets:** - Cash and Cash Equivalents: - 2020: $200 million - 2019: $400 million - Accounts Receivable: - 2020: $900 million - 2019: $800 million - Inventory: - 2020: $500 million - 2019: $650 million - Other Current Assets: - 2020: $400 million - 2019: $250 million - Total Current Assets: - 2020: $2,000 million - 2019: $2,100 million - **Non-Current Assets:** - Property, Plant, & Equipment (Net
Transcribed Image Text:**Los Altos, Inc. Financial Analysis** **Quick Ratio:** - 2020: 0 - 2019: 0 --- **Income Statement (For Years Ended December 31, 2020 and 2019)** - **Net Sales:** - 2020: $10,000 million - 2019: $9,500 million - **Cost of Goods Sold:** - 2020: $5,500 million - 2019: $5,200 million - **Gross Profit:** - 2020: $4,500 million - 2019: $4,300 million - **Selling and Administrative Expenses:** - 2020: $2,800 million - 2019: $2,700 million - **Income from Operations:** - 2020: $1,700 million - 2019: $1,600 million - **Interest Expense:** - 2020: $300 million - 2019: $250 million - **Income Before Income Taxes:** - 2020: $1,400 million - 2019: $1,350 million - **Income Tax Expense:** - 2020: $420 million - 2019: $400 million - **Net Income:** - 2020: $980 million - 2019: $950 million --- **Balance Sheet (December 31, 2020 and 2019)** **Assets:** - **Current Assets:** - Cash and Cash Equivalents: - 2020: $200 million - 2019: $400 million - Accounts Receivable: - 2020: $900 million - 2019: $800 million - Inventory: - 2020: $500 million - 2019: $650 million - Other Current Assets: - 2020: $400 million - 2019: $250 million - Total Current Assets: - 2020: $2,000 million - 2019: $2,100 million - **Non-Current Assets:** - Property, Plant, & Equipment (Net
**Quick Ratio** Calculate the quick ratio for Los Altos, Inc., for both years, using the financial statements displayed below. Round to the nearest hundredth. | | 2020 | 2019 | |------|------|------| | Quick Ratio | 0 | 0 | Did the company’s ability to pay its current liabilities improve over the two years? [Dropdown] --- **Los Altos, Inc. Income Statement For Years Ended December 31, 2020 and 2019 (in millions)** | | 2020 | 2019 | |----------------------------------------|---------|---------| | Net sales | $10,000 | $9,500 | | Cost of goods sold | 5,500 | 5,200 | | Gross profit | 4,500 | 4,300 | | Selling and administrative expenses | 2,800 | 2,700 | | Income from operations | 1,700 | 1,600 | | Interest expense | 300 | 250 | | Income before income taxes | 1,400 | 1,350 | | Income tax expense | 420 | 400 | | Net income | 980 | 950 | --- **Los Altos, Inc. Balance Sheet December 31, 2020 and 2019 (in millions)** **Assets** | | 2020 | 2019 | |----------------------------------------|---------|---------| | Current assets | | | | Cash and cash equivalents | $200 | $400 | | Accounts receivable | 900 | 800 | | Inventory | 500 | 650 | | Other current assets | 400 | 250 | | Total current assets | 2,000 | 2,100 | | Property, plant, & equipment (net) | 2,600 | 2,500 | | Other assets | 5,700 | 5,900 | | Total assets | $10,300 | $10,500 | **Liabilities and Stockholders' Equity** [The specific figures for liabilities and stockholders’ equity are not provided in the image.]
Transcribed Image Text:**Quick Ratio** Calculate the quick ratio for Los Altos, Inc., for both years, using the financial statements displayed below. Round to the nearest hundredth. | | 2020 | 2019 | |------|------|------| | Quick Ratio | 0 | 0 | Did the company’s ability to pay its current liabilities improve over the two years? [Dropdown] --- **Los Altos, Inc. Income Statement For Years Ended December 31, 2020 and 2019 (in millions)** | | 2020 | 2019 | |----------------------------------------|---------|---------| | Net sales | $10,000 | $9,500 | | Cost of goods sold | 5,500 | 5,200 | | Gross profit | 4,500 | 4,300 | | Selling and administrative expenses | 2,800 | 2,700 | | Income from operations | 1,700 | 1,600 | | Interest expense | 300 | 250 | | Income before income taxes | 1,400 | 1,350 | | Income tax expense | 420 | 400 | | Net income | 980 | 950 | --- **Los Altos, Inc. Balance Sheet December 31, 2020 and 2019 (in millions)** **Assets** | | 2020 | 2019 | |----------------------------------------|---------|---------| | Current assets | | | | Cash and cash equivalents | $200 | $400 | | Accounts receivable | 900 | 800 | | Inventory | 500 | 650 | | Other current assets | 400 | 250 | | Total current assets | 2,000 | 2,100 | | Property, plant, & equipment (net) | 2,600 | 2,500 | | Other assets | 5,700 | 5,900 | | Total assets | $10,300 | $10,500 | **Liabilities and Stockholders' Equity** [The specific figures for liabilities and stockholders’ equity are not provided in the image.]
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