How do I solve this? **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.]

Name: How do I solve this? **Los Altos, Inc. Financial Analysis****Quick Rat
Uploaded: 2022-11-18T00:26:54.000Z
Channel: Bartleby
Description: How do I solve this? **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:*

Quick Ratio: Quick ratio a measure of liquidity. It measures company's ability to pay its current liabilities. Formula: Quick Ratio=Current Assets-InventoryCurrent LiabilitiesCalculation of Quick Ratio 2020 ($ in million) 2019 ($ in million) Currents Assets 2000 2100 Inventory 500 650 Current Liabilities 3000 2900 Quick Ratio (2000 - 500)/3000 = 0.5 (2100-650)/2900 = 0.5 From the above calculation, quick ratio is reduced from 0.5 in 2019 to 0.5 in 2020. Therefore, company's ability to pay its current liabilities has not improved.