Suppose the following financial data were reported by 3M Company (USA) for 2019 and 2020 (dollars in
Question:
Suppose the following financial data were reported by 3M Company (USA) for 2019 and 2020 (dollars in millions).
Instructions
a. Calculate the current ratio and working capital for 3M for 2019 and 2020.
b. Suppose that at the end of 2020, 3M management used $200 million cash to pay off $200 million of accounts payable. How would its current ratio and working capital have changed?
зМ Company Statement of Financial Position (partial) 2020 2019 Current assets $ 3,040 Cash and cash equivalents Accounts receivable, net $1,849 3,250 3,195 Inventories 2,639 3,013 Other current assets 1,866 1,541 $10,795 $ 4,897 $9,598 $5,839 Total current assets Current liabilities
Step by Step Answer:
a Current ratio 20199598 5839 1641 202010795 4897 2201 Working capital 201...View the full answer
Accounting Principles
ISBN: 978-1119419617
IFRS global edition
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt
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
-
At Summato Wholesale, two mail clerks open all mail receipts. How does this strengthen internal control?
-
At December 31, 2020, the end of its first year of operations, Franklin SA chose to use the revaluation framework allowed under IFRS. Franklins ledger shows Equipment 750,000 and Accumulated...
-
The intangible assets section of Glover Restaurants at December 31, 2019, is presented below. Patents (60,000 cost less 6,000 amortization) ..................................54,000 Franchises (48,000...
-
What are the main technical challenges faced by firms that wish to internationalise their selection and assessment approaches?
-
a. Predict the relative lengths and strengths of the bonds in Cl2 and Br2. b. Predict the relative lengths and strengths of the bonds in HF, HCl, and HBr.
-
What is the value chain? How is it useful to strategy formulation?
-
The taxi-in times for 48 flights that landed in Los Angeles have a mean of 11.4 min and a standard deviation of 7.0 min. What is the z score for a taxi-in time of 6 min?
-
The British government offered physicians incentive pay to offer better customer (patient) service, such as managing appointments better. In particular, physicians can score points by seeing a...
-
An analysis of the accounts shows the following end of month adjustments. For each transaction, find correct journal entries. Half of unearned revenue was earned in January.
-
Assume an algorithm that takes log 2 n microseconds to solve a problem. Find the largest input size n such that the algorithm solves the problem in time in 24 days. a) 2 140000 b) 2 1440000 c) 2...
-
Selected data from a February payroll register for Saputra Group are presented below. Some amounts are intentionally omitted. Social Security taxes are 7.65%. Medical insurance premium is 4% of gross...
-
Xi Ping is reviewing the principle of segregation of duties. What are the two common applications of this principle?
-
The accounting staff of CCB Enterprises has completed the financial statements for the 2014 calendar year. The statement of income for the current year and the comparative statements of financial...
-
Shared production can result in lower prices for the consumer. Provide a real-world example that illustrates this and explain the relationship between shared production and lowering of prices. How do...
-
As you might know, during 2021 we faced a major issue in our Operations/Supply Chain: Global Supply Chain collapse that affected several industries and customers Questions that need to be answered 1....
-
Submit a draft of Section I (Introduction) based on the strategic plan of the agency. Note that you will be writing about the Acme Health Care Agency PDF This draft should be as detailed as possible...
-
Which is the image of following mapping? 2 0-5 4 3 7
-
Every organization should develop a portfolio management framework that fits its business and includes the following elements: 1. a project review board, 2. structured, consistent collection and...
-
The summary of the payroll for the monthly pay period ending July 15 indicated the following: Sales salaries.................................................................115000 Federal income tax...
-
On average there are four traffic accidents in a city during one hour of rush-hour traffic. Use the Poisson distribution to calculate the probability that in one such hour there arc (a) No accidents...
-
Presented below are two independent situations. 1. Heath Cosmetics acquired 15% of the 200,000 shares of common stock of Van Fashion at a total cost of $13 per share on March 18, 2010. On June 30,Van...
-
Ryan Company purchased 70% of the outstanding common stock of Wayne Corporation. Instructions (a) Explain the relationship between Ryan Company and Wayne Corporation. (b) How should Ryan account for...
-
At December 31, 2010, the trading securities for Natoli, Inc. are as follows. Instructions(a) Prepare the adjusting entry at December 31, 2010, to report the securities at fair value.(b) Show the...
-
Explain the principles behind NoSQL database architectures, including key-value stores, document databases, and column-family stores, and discuss their suitability for different types of...
-
Is the future promising or questionable for Dollar General? What does it need to do in the future to succeed? Why? Make recommendations based on your critical assessment about what Dollar General...
-
Complete research into what the problem with pricing strategies is in today's society. Use examples, and discuss your own findings. - Provide one paragraph discussing why current pricing strategies...
Study smarter with the SolutionInn App