Chapter 8, Problem 84.5C

To determine

Concept introduction:

Quick Ratio/ Acid test ratio:

Acid test ration is also called Quick ratio. This ratio is calculated by dividing the quick assets (Cash, Cash equivalents, Short term investments and current receivables) by total current liabilities for the year. The formula for Acid test ratio is as follows:

$Acidtestratio=\frac{\left(Cash+Cashequivalents+Shortterminvestments+Accountsreceivables\right)}{CurrentLiabilities}$

Cash ratio:

Cash ratio is calculated by dividing and cash and cash equivalents by the total current liabilities. The formula for Cash ratio is as follows:

Cash Ratio = Cash and cash equivalents/ Current liabilities

To calculate:

The Quick and Cash ratio of Under Armour and Columbia Sportswear for the year 2016 and 2015.