McCormick: Consolidated Balance Sheets Dollar Amounts in Millions 20X220X3Assets Current Assets Cash and Equivalents$79.0 $63.0 Receivables465.9 495.5 Inventories615.0 676.9 Prepaid Expenses and Other Assets125.5 134.8 Total Current Assets$1,285.4 $1,370.2 Property and Equipment, Net547.3 576.6 Goodwill1,695.3 1,798.5 Intangible Assets, net323.5 333.4 Investments and Other Assets313.9 371.0 Total Assets$4,165.4 $4,449.7 Liabilities and Shareholders' Equity Current Liabilities Short-Term Borrowings$140.3 $211.6 Current Portion of Long-Term Debt252.3 2.5 Trade Accounts Payable375.8 387.3 Other Accrued Liabilities419.2 461.7 Total Current Liabilities$1,187.6 $1,063.1 Long-Term Debt779.2 1,019.0 Other Long-Term Liabilities498.4 419.9 Total Liabilities$2,465.2 $2,502.0 Shareholders' Equity Common Stock908.2 962.4 Retained Earnings934.6 970.4 Accumulated Other Comprehensive Loss(159.9)(0.3)Noncontrolling interests17.3 15.2 Total Shareholders' Equity$1,700.2 $1,947.7 Total Liabilities and Shareholders' Equity$4,165.4 $4,449.7 Additional information for 20X3 is as follows (amounts in millions):Total credit sales (all on credit)$4,123.4Costs of goods sold2,457.6Net income389.0Required:Next Level Compute the following ratios for 20X3. Provide a brief description of what each ratio reveals about McCormick. (McCormick uses cash and equivalents, short-term securities, and receivables in their quick ratio calculation.) Current = fill in the blank 4 (Round your answer to two decimal places.)Quick = fill in the blank 5 (Round your answer to two decimal places.)Inventory turnover days = fill in the blank 6 days (Use 365 days. Round your answer to one decimal place.)Accounts receivable turnover days = fill in the blank 7 days (Use 365 days. Round your answer to one decimal place.)Accounts payable turnover days = fill in the blank 8 days (Use 365 days. Round your answer to one decimal place.)Operating cycle (in days) = fill in the blank 9 days (Use 365 days. Round your answer to one decimal place.)Total asset turnover = fill in the blank 10 (Round your answer to two decimal places.)

Answered: Expenses and Other Assets 125.5 134.8…

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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Question

McCormick: Consolidated Balance Sheets
	Dollar Amounts in Millions
	20X2	20X3
Assets
Current Assets
Cash and Equivalents	$79.0	$63.0
Receivables	465.9	495.5
Inventories	615.0	676.9
Prepaid Expenses and Other Assets	125.5	134.8
Total Current Assets	$1,285.4	$1,370.2
Property and Equipment, Net	547.3	576.6
Goodwill	1,695.3	1,798.5
Intangible Assets, net	323.5	333.4
Investments and Other Assets	313.9	371.0
Total Assets	$4,165.4	$4,449.7
Liabilities and Shareholders' Equity
Current Liabilities
Short-Term Borrowings	$140.3	$211.6
Current Portion of Long-Term Debt	252.3	2.5
Trade Accounts Payable	375.8	387.3
Other Accrued Liabilities	419.2	461.7
Total Current Liabilities	$1,187.6	$1,063.1
Long-Term Debt	779.2	1,019.0
Other Long-Term Liabilities	498.4	419.9
Total Liabilities	$2,465.2	$2,502.0
Shareholders' Equity
Common Stock	908.2	962.4
Retained Earnings	934.6	970.4
Accumulated Other Comprehensive Loss	(159.9)	(0.3)
Noncontrolling interests	17.3	15.2
Total Shareholders' Equity	$1,700.2	$1,947.7
Total Liabilities and Shareholders' Equity	$4,165.4	$4,449.7

Additional information for 20X3 is as follows (amounts in millions):

Total credit sales (all on credit)	$4,123.4
Costs of goods sold	2,457.6
Net income	389.0

Required:

Next Level Compute the following ratios for 20X3. Provide a brief description of what each ratio reveals about McCormick. (McCormick uses cash and equivalents, short-term securities, and receivables in their quick ratio calculation.)

Current = fill in the blank 4 (Round your answer to two decimal places.)
Quick = fill in the blank 5 (Round your answer to two decimal places.)
Inventory turnover days = fill in the blank 6 days (Use 365 days. Round your answer to one decimal place.)
Accounts receivable turnover days = fill in the blank 7 days (Use 365 days. Round your answer to one decimal place.)
Accounts payable turnover days = fill in the blank 8 days (Use 365 days. Round your answer to one decimal place.)
Operating cycle (in days) = fill in the blank 9 days (Use 365 days. Round your answer to one decimal place.)
Total asset turnover = fill in the blank 10 (Round your answer to two decimal places.)

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Current ratios refer to the type of ratio which reflects the capabilities of a company to pay off its short-term debts or liabilities from its current assets.

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