The following financial data were reported by 3M Company (USA) for 2009 and 2010 (dollars in millions).
Question:
Instructions
(a) Calculate the current ratio and working capital for 3M for 2009 and 2010.
(b) Suppose that at the end of 2010, 3M management used $200 million cash to pay off $200 million of accounts payable. How would its current ratio and working capital have changed?
2010 2009 Current assets Other current assets Inventories Accounts receivable, net Cash and cash equivalents Total current assets Current liabilities $ 2,068 $ 1,866 2,639 3,250 3,040 $10,795 $ 4,897 3,155 3,615 3,377 $12,215 $ 6,089
Step by Step Answer:
a Current ratio 201012215 6089 2011 200910795 4897 2201 Working capital 2...View the full answer
Financial Accounting IFRS
ISBN: 978-1118285909
2nd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Related Video
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.
Students also viewed these Business questions
-
The following financial data were reported by Verizon Wireless for two recent years (in millions): Required Calculate the current and debt to assets ratios for each year. How would the most recent...
-
Suppose the following financial data were reported by 3M Company for 2013 and 2014 (dollars in millions). Instructions (a) Calculate the current ratio and working capital for 3M for 2013 and 2014....
-
Suppose the following financial data were reported by 3M Company for 2018 and 2019 (dollars in millions). Instructions (a) Calculate the current ratio and working capital for 3M for 2018 and 2019....
-
Pretty much any real object takes up space. This can cause confusion when asking, for instance, what is the r position of a car? Do we mean the front end of the car? The back end? Somewhere in...
-
How does a simple letter of credit work?
-
A hydrogen atom is in the ground state. It absorbs energy and makes a transition to the n = 3 excited state. The atom returns to the ground state by emitting two photons. What are their wavelengths?
-
The roof of a refrigerated truck compartment is of composite construction, consisting of a layer of foamed urethane insulation \(\left(t_{2}=50 \mathrm{~mm}, k_{i}=0.026 \mathrm{~W} / \mathrm{m}...
-
Transactions for Marlin Company for the month of June are presented below. Identify the accounts to be debited and credited for each transaction. June 1 Issues common stock to investors in exchange...
-
Explain what exactly an executive order is and provide real time example about it ?
-
A control engineer, N. Minorsky, designed an innovative ship steering system in the 1930s for the U.S. Navy. The system is represented by the block diagram shown in Figure E2.8, where Y(s) is the...
-
The adjusted trial balance for Zhang Corporation at the end of the current year contained the following accounts. Interest Payable HK$ 9,000 Lease Liability 59,500 Bonds Payable, due 2019 204,000...
-
The following section is taken from Barton Corp.s statement of financial position at December 31, 2013. Non-current liabilities Bonds payable, 7%, due January 1, 2018 $1,600,000 Current liabilities...
-
Sedona Company set the following standard costs for one unit of its product for 2015. Direct material (20 Ibs. @ $2.50 per Ib.) . . . . . . . . . . . . . . . . . . . . . . . $ 50 Direct labor (10...
-
In Problems 530, a. Classify the sequences as arithmetic, geometric, Fibonacci, or none of these. b. If arithmetic, give d; if geometric, give r; if Fibonacci, give the first two terms; and if none...
-
Why is it sometimes necessary to design information systems that have explicitly concurrent behaviour?
-
Why is an open layered architecture more difficult to maintain?
-
What are the main differences between the MVC architecture and the layered and partitioned architecture?
-
In what sense does a broker decouple two subsystems that need to communicate with each other? How does this work?
-
The channel shown in Fig. 14.22 has a surface of floatfinished concrete and is laid on a slope that falls 0.1 m per 100 m of length. Calculate the normal discharge and the Froude number for a depth...
-
If you want to solve a minimization problem by applying the geometric method to the dual problem, how many variables and problem constraints must be in the original problem?
-
The return on assets for Tresh Corporation is 7.6%. During the same year Treshs return on common stockholders equity is 12.8%.What is the explanation for the difference in the two rates?
-
Which two ratios do you think should be of greatest interest to: (a) A pension fund considering the purchase of 20-year bonds? (b) A bank contemplating a short-term loan? (c) A common stockholder?
-
Which two ratios do you think should be of greatest interest to: (a) A pension fund considering the purchase of 20-year bonds? (b) A bank contemplating a short-term loan? (c) A common stockholder?
-
Question: Read the document on this link: https://pui2022q4.tiiny.site/ 1. You form part of a company in South Africa and you have to continuously do business locally and internationally on the...
-
Banjo Education Corp. issued a 4%, $80,000 bond that pays interest semiannually each June 30 and December 31. The date of issuance was January 1, 2020. The bonds mature after four years. The market...
-
A projectile if fired from 19.6m above the ground with an initial speed of 55.6m/s at an angle of 41.2 degrees above the horizontal. a) Determine the time necessary for the projectile to reach its...
Study smarter with the SolutionInn App