Suppose the following financial data were reported by 3M Company for 2016 and 2017 (dollars in millions).

Instructions

(a) Calculate the current ratio and working capital for 3M for 2016 and 2017.

(b) Suppose that at the end of 2017, 3M management used $200 million cash to pay off $200 million of accounts payable. How would its current ratio and working capital have changed?

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зМ СОMPANY Balance Sheets (partial) 2017 2016 Current assets Cash and cash equivalents Accounts receivable, net $ 3,040 3,250 $1,849 3,195 3,013 1,541 Inventories 2,639 Other current assets 1,866 Total current assets Current liabilities $9,598 $5,839 $10,795 $ 4,897