Presented below is information reported by Christian Dior (FRA) related to its off-balance-sheet commitments in its 2018 annual report. Christian Dior reported current assets of €29,585 and total current liabilities of €17,363 at December 31, 2018. (All amounts are in millions of euros.) 

Christian Dior

Note 30 (partial): Off-balance-sheet commitments

As of December 31, 2018, the maturity dates of these commitments break down as follows (euros in millions):

Lease and similar commitments

In connection with its business activities, the Group enters into agreements for the rental of premises or airport concession contracts. The Group also finances a portion of its equipment through long term operating leases.

The fixed or minimum portion of commitments in respect of the irrevocable period of operating lease or concession contracts were as follows as of December 31, 2018 (euros in millions):

 ................................................................................................................. December 31, 2018
Less than 1 year .................................................................................................... 2,334
One to 5 years ........................................................................................................ 6,098
More than 5 years ................................................................................................... 4,141
Commitments given for operating leases and concession fees ...................... 12,573

Instructions

a. Compute Christian Dior’s working capital and current ratio (current assets ÷ current liabilities) with and without the off-balance-sheet items reported in Note 30.

b. Briefly discuss how the information provided in the off-balance-sheet note would be useful in evaluating Christian Dior for loans (1) due in 1 year, and (2) due in 5 years.

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Less than 1 One to 5 More than 5 Year Years Years Total Grapes, wines and eaux-de-vie 659 1,346 35 2,040 Other purchase commitments for raw materials 123 91 1 215 Industrial and commercial fixed assets 601 121 (1) 721 Investments in joint venture shares and noncurrent financial assets 2,049 102 2,151 Total 3:432 1,660 35 5,127