Current Position Analysis 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: Current Year (in millions) Previous Year (in millions) Cash and cash equivalents $2,419 $2,589 Short-term investments, at cost 1,718 4,809 Accounts and notes receivable, net 5,463 4,932 Inventories 2,250 2,400 Prepaid expenses and other current assets 750 888 Short-term obligations 240 2,548 Accounts payable 5,760 5,672 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Current Year Previous Year 1. Current ratio fill in the blank 1 fill in the blank 2 2. Quick ratio fill in the blank 3 fill in the blank 4 b. The liquidity of Sherwood has increased some over this time period. Both the current and quick ratios have increased . Sherwood is a strong company with ample resources for meeting short-term obligations. Its liquidity as measured by the current and quick ratios has improved during this period.
Current Position Analysis 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: Current Year (in millions) Previous Year (in millions) Cash and cash equivalents $2,419 $2,589 Short-term investments, at cost 1,718 4,809 Accounts and notes receivable, net 5,463 4,932 Inventories 2,250 2,400 Prepaid expenses and other current assets 750 888 Short-term obligations 240 2,548 Accounts payable 5,760 5,672 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Current Year Previous Year 1. Current ratio fill in the blank 1 fill in the blank 2 2. Quick ratio fill in the blank 3 fill in the blank 4 b. The liquidity of Sherwood has increased some over this time period. Both the current and quick ratios have increased . Sherwood is a strong company with ample resources for meeting short-term obligations. Its liquidity as measured by the current and quick ratios has improved during this period.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Current Position Analysis
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:
| Current Year (in millions) |
Previous Year (in millions) |
|||
| Cash and cash equivalents | $2,419 | $2,589 | ||
| Short-term investments, at cost | 1,718 | 4,809 | ||
| Accounts and notes receivable, net | 5,463 | 4,932 | ||
| Inventories | 2,250 | 2,400 | ||
| Prepaid expenses and other current assets | 750 | 888 | ||
| Short-term obligations | 240 | 2,548 | ||
| Accounts payable | 5,760 | 5,672 |
a. Determine the (1)
| Current Year | Previous Year | |
| 1. Current ratio | fill in the blank 1 | fill in the blank 2 |
| 2. Quick ratio | fill in the blank 3 | fill in the blank 4 |
b. The liquidity of Sherwood has increased some over this time period. Both the current and quick ratios have increased . Sherwood is a strong company with ample resources for meeting short-term obligations. Its liquidity as measured by the current and quick ratios has improved during this period.
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