Following is the current assets and current liabilities portion of the balance sheet of Keurig Green Mountain
Question:
Following is the current assets and current liabilities portion of the balance sheet of Keurig Green Mountain for the years ended September 26, 2015 and September 27, 2014:
Required
Determine the company's current ratio for each fiscal year. What do the ratios indicate about the liquidity of the company? What were the major causes for any changes in liquidity?
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
(Dollars in thousands) Assets Current assets: September 26, 2015 September 27, 2014 Cash and cash equivalents Restricted cash and cash equivalents Short-term investment Receivables, less uncollectible accounts and return $ 59,334 30,460 $761,214 378 100,000 allowances of $35,459 and $66,120 at September 26, 517,936 691,980 51,786 95,526 70,181 $1,517,203 621,451 835,167 2015 and September 27, 2014, respectively Inventories Income taxes receivable Other current assets Deferred income taxes, net 69,272 58,038 $2,445,520 Total current assets Current liabilities: Current portion of long-term debt Current portion of capital lease and financing obligations Accounts payable Accrued expenses Income tax payable Dividend payable Deferred income taxes, net Other current liabilities 279 3,271 298,609 226,519 1,085 44,048 264 28,049 $ 602,124 $ 19,077 2,226 411,107 305,677 53,586 40,580 340 10,395 $ 842,988 Total current liabilities
Step by Step Answer:
Current ratio for September 26 2015 Current AssetsCurrent Liabilities 1517203602124 252 ...View the full answer
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1337491471
10th edition
Authors: Gary A. Porter, Curtis L. Norton
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The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.
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