Problem 8-9B Calculate and analyze ratios (LO8-6)

Selected financial data regarding current assets and current liabilities for Ferris Air and Oceanic Airlines are provided as follows:

($ in millions)	Ferris Air						Oceanic Airlines
Current assets:
Cash and cash equivalents		$	1,113					$	2,791
Current investments			1,857						958
Net receivables			578						2,156
Inventory			469						1,023
Other current assets			210						1,344
Total current assets		$	4,227					$	8,272
Current liabilities:
Current debt		$	271					$	1,627
Accounts payable			2,209						5,686
Other current liabilities			2,170						5,957
Total current liabilities		$	4,650					$	13,270

Required:

1-a. Calculate the current ratio for Ferris Air and Oceanic Airlines. (Enter your answers in millions. For example, $5,500,000 should be entered as 5.5.)

Current Ratio	Ferris Air			Oceanic Airlines
		=	0		=	0

-b. Which Airlines has the better current ratio? multiple choice 1

• Ferris Air

• Oceanic Airlines

2-a. Calculate the acid-test (quick) ratio for Ferris Air and Oceanic Airlines. (Enter your answers in millions. For example, $5,500,000 should be entered as 5.5.)

Acid-Test Ratio	Ferris Air			Oceanic Airlines
		=	0		=	0

2-b. Which Airlines has the better acid-test ratio? multiple choice 2

• Ferris Air

• Oceanic Airlines