Problem #4: Below is selected financial data regarding current assets and current liabilities for two companies. Company B has recently come out of bankruptcy. ($ in millions) Current Assets: Company A Coтрany B Company A Coтрапy B Current Liabilities: Cash & Cash Equiv. $2,179 $ 322 Current Debt 849 $ 1,855 2,249 Accounts Payable Salaries Payable Unearned Revenue Current Investments 6,675 2,139 1,592 Net Receivables 1,176 1,594 2,307 1,516 Inventory 873 1,094 5,865 6,701 Other Current Assets Other Current Liab. Total Current Liab 832 639 1,126 2,208 Total Current Assets $7,309 $10,324 $12,286 $13,872 Required: 1. Calculate and compare working capital for the two companies. 2. Calculate the current ratio for the two companies. Which company has a higher current ratio?
Problem #4: Below is selected financial data regarding current assets and current liabilities for two companies. Company B has recently come out of bankruptcy. ($ in millions) Current Assets: Company A Coтрany B Company A Coтрапy B Current Liabilities: Cash & Cash Equiv. $2,179 $ 322 Current Debt 849 $ 1,855 2,249 Accounts Payable Salaries Payable Unearned Revenue Current Investments 6,675 2,139 1,592 Net Receivables 1,176 1,594 2,307 1,516 Inventory 873 1,094 5,865 6,701 Other Current Assets Other Current Liab. Total Current Liab 832 639 1,126 2,208 Total Current Assets $7,309 $10,324 $12,286 $13,872 Required: 1. Calculate and compare working capital for the two companies. 2. Calculate the current ratio for the two companies. Which company has a higher current ratio?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Problem #4:
Below is selected financial data regarding current assets and current liabilities for two companies.
Company B has recently come out of bankruptcy.
($ in millions)
Current Assets:
Company A
Company B
Company A Coтрany B
Current Liabilities:
Cash & Cash Equiv.
$2,179
$
Current Debt
$
$ 1,855
322
849
Accounts Payable
Salaries Payable
Current Investments
2,249
6,675
2,139
1,592
Net Receivables
1,176
1,594
1,094
2,307
1,516
Inventory
873
Unearned Revenue
5,865
6,701
Other Current Assets
832
Other Current Liab.
Total Current Liab
639
1,126
2,208
wwww
Total Current Assets
$7,309
$10,324
$12,286
$13,872
Required:
1. Calculate and compare working capital for the two companies.
2. Calculate the current ratio for the two companies. Which company has a higher current ratio?
Item Company A
Company B
1.
2.
Answer:
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