Sherwood, Inc., the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years: Line Item Description Current Year (in millions) Previous Year (in millions) Cash and cash equivalents $4,611 $4,986 Short-term investments, at cost 3,275 9,259 Accounts and notes receivable, net 10,411 9,497 Inventories 1,445 963 Prepaid expenses and other current assets 481 356 Short-term obligations 385 4,089 Accounts payable 9,245 9,101 a. Determine the (1) current ratio and (2) quick ratio for both years. Round your answers to one decimal place. Line Item Description Current Year Previous Year 1. Current ratio ? ? 2. Quick ratio ? ? slightly over this time period. Both the current and quick ratios have fill in the blank 2 of 4 . Sherwood is a fill in the blank 3 of 4 company with fill in the blank 4 of 4 resources for meeting short-term obligations.
Sherwood, Inc., the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years:
| Line Item Description | Current Year (in millions) |
Previous Year (in millions) |
|---|---|---|
| Cash and cash equivalents | $4,611 | $4,986 |
| Short-term investments, at cost | 3,275 | 9,259 |
| Accounts and notes receivable, net | 10,411 | 9,497 |
| Inventories | 1,445 | 963 |
| Prepaid expenses and other current assets | 481 | 356 |
| Short-term obligations | 385 | 4,089 |
| Accounts payable | 9,245 | 9,101 |
a. Determine the (1)
| Line Item Description | Current Year | Previous Year |
|---|---|---|
| 1. Current ratio | ? | ? |
| 2. Quick ratio | ? | ? |
slightly over this time period. Both the current and quick ratios have fill in the blank 2 of 4
. Sherwood is a fill in the blank 3 of 4
company with fill in the blank 4 of 4
resources for meeting short-term obligations.
The current ratio contrasts the total current assets and liabilities of the business organizations. In order to determine the current ratio, the current assets are required to be divided by the current liabilities.
The current ratio is computed by the business entities so that the investors are able to understanding about the capacity of the entity to pay off its current liabilities with its current assets.
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