Selected 2016 balance sheet and income statement information for Cloud 9 Super Store and Big T follow: Cloud 9 (in $000s)Big T (in millions)Cash $ 19,453 $ 1,960Accounts receivable 13,536 11,682Inventory 87,606 15,806Other current assets3,1763,720Total current liabilities143,63628,062Total liabilities 242,734 63,210Total equity 204,345 41,395Pre-tax income45,040 8,066Interest expense 4,128 1,524 A. Calculate the current ratio and quick ratio for both companies.B. Which company is more liquid?C. Calculate the times interest earned and debt-to-equity ratio for both companies.D. Which company is more solvent?

Name: Selected 2016 balance sheet and income statement information for Cloud
Uploaded: 2022-11-18T00:26:54.000Z
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Description: Selected 2016 balance sheet and income statement information for Cloud 9 Super Store and Big T follow: Cloud 9 (in $000s)Big T (in millions)Cash $ 19,453 $ 1,960Accounts receivable 13,536 11,682Inventory 87,606 15,806Other current assets3,1763

Current ratio formulae is =Current assets/ current liabilities Current assets=Cash and cash…

Answered: Selected 2016 balance sheet and income…

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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Selected 2016 balance sheet and income statement information for Cloud 9 Super Store and Big T follow:

	Cloud 9 (in $000s)	Big T (in millions)
Cash	$ 19,453	$ 1,960
Accounts receivable	13,536	11,682
Inventory	87,606	15,806
Other current assets	3,176	3,720
Total current liabilities	143,636	28,062
Total liabilities	242,734	63,210
Total equity	204,345	41,395
Pre-tax income	45,040	8,066
Interest expense	4,128	1,524

A.     Calculate the current ratio and quick ratio for both companies.
B.     Which company is more liquid?
C.     Calculate the times interest earned and debt-to-equity ratio for both companies.
D.     Which company is more solvent?

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