Compute the (1) current ratio and the (2) quick ratio for Nike Inc. using the following excerpt from the balance sheet reported in a recent 10-K of Nike Inc. At May 31 (in millions) Current assets Cash and equivalents Short-term investments Accounts receivable, net Inventories Deferred income taxes Prepaid expenses and other current assets Total current assets $6,934 3,730 6,044 7,807 389 1,968 $26,872
Compute the (1) current ratio and the (2) quick ratio for Nike Inc. using the following excerpt from the balance sheet reported in a recent 10-K of Nike Inc. At May 31 (in millions) Current assets Cash and equivalents Short-term investments Accounts receivable, net Inventories Deferred income taxes Prepaid expenses and other current assets Total current assets $6,934 3,730 6,044 7,807 389 1,968 $26,872
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Calculating Liquidity Ratios
Compute the (1) current ratio and the (2) quick ratio for Nike Inc. using the following excerpt from the balance sheet reported in a recent 10-K of Nike Inc.
At May 31 (in millions)
Current assets
Cash and equivalents
Short-term investments
Accounts receivable, net
Inventories
Deferred income taxes
Prepaid expenses and other current assets
Total current assets
Current liabilities
Current portion of long-term debt
Notes payable
Accounts payable
Accrued liabilities
Income taxes payable
Total current liabilities
Ratio
1. Current ratio $
Ratio
2. Quick ratio $
Numerator
Numerator
$6,934
3,730
6,044
7,807
389
1,968
$26,872
++ $
$193
133
3,836
3,951
71
$8,184
Denominator
Denominator
==
Result
Result
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