Compute Liquidity and Solvency Ratios for Competing FirmsHalliburton and Schlumberger compete in the oil field services sector. Refer to the following 2018 financial data forthe two companies to answer the requirements.$ millionsCash and equivalentsShort-term investmentsAccounts receivableHAL SLB$2,008 $1,4331,3445,182 7,802Current assetsCurrent liabilitiesTotal liabilitiesTotal equity11,151 15,7314,754 13,35116,438 33,9219,449 36,220Earnings before interest and tax (EBIT) 2,442 3,020Interest expense, gross554537a. Compute the following measures for both companies.Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555).HALSLB1. Current ratio2.32 X1.17 x2. Quick ratio1.5 x0.68 *3. Times interest earned4.45 x5.67 x4. Liabilities-to-equity1.7 x0.92 xb. Which company appears more liquid? HALc. Which company appears more solvent? SLB =>

· Ratio analysis used to identify the business performance of the company.· It is used to measure…

a. Compute the following measures for both companies. Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555). HAL SLB 1. Current ratio 2.32 x 1.17 x 2. Quick ratio 1.5 x 0.68 x 3. Times interest earned 4.45 x 5.67 x 4. Liabilities-to-equity 1.7 x 0.92 x b. Which company appears more liquid? HAL✰ c. Which company appears more solvent? SLB =

a. Compute the following measures for both companies. Note: Round your final answers to two decimal places (for example, enter 6.78 for 6.77555). HAL SLB 1. Current ratio 2.32 x 1.17 x 2. Quick ratio 1.5 x 0.68 x 3. Times interest earned 4.45 x 5.67 x 4. Liabilities-to-equity 1.7 x 0.92 x b. Which company appears more liquid? HAL✰ c. Which company appears more solvent? SLB =

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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