Calculate the quick ratio for Los Altos, Ic., for both years, using the financial statements displayed below. Round to nearest hundredth. 2020 2019 Quick Ratio 0 x Did the company's ability to pay its current liabilities improve over the two years? No + 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) 2020 2019 Assets 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 Other assets 5,700 5,900 Total assets $10,300 $10,500 Liabilities and Stockholders' Equity Current liabilities $3,000 $2,900 Long-term liabilities 5,000 5,400 Total liabilities 8,000 8,300 Stockholders' equity - common 2,300 2,200 Total Liabilities and Stockholders' Equity $10,300 $10,500
Calculate the quick ratio for Los Altos, Ic., for both years, using the financial statements displayed below. Round to nearest hundredth. 2020 2019 Quick Ratio 0 x Did the company's ability to pay its current liabilities improve over the two years? No + 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) 2020 2019 Assets 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 Other assets 5,700 5,900 Total assets $10,300 $10,500 Liabilities and Stockholders' Equity Current liabilities $3,000 $2,900 Long-term liabilities 5,000 5,400 Total liabilities 8,000 8,300 Stockholders' equity - common 2,300 2,200 Total Liabilities and Stockholders' Equity $10,300 $10,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Calculate the quick ratio for Los Altos, Ic., for both years, using the financial statements displayed below. Round to nearest hundredth.
2020
2019
Quick Ratio
0 x
Did the company's ability to pay its current liabilities improve over the two years? No +
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)
2020
2019
Assets
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
Transcribed Image Text:Other assets
5,700
5,900
Total assets
$10,300 $10,500
Liabilities and Stockholders' Equity
Current liabilities
$3,000 $2,900
Long-term liabilities
5,000
5,400
Total liabilities
8,000
8,300
Stockholders' equity - common
2,300
2,200
Total Liabilities and Stockholders' Equity $10,300 $10,500
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