Question: Selected financial data regarding current assets and current liabilities for two competing companies, Simon and Garfunkel, are provided as follows: ($ in millions) Simon Garfunkel
Selected financial data regarding current assets and current liabilities for two competing companies, Simon and Garfunkel, are provided as follows:
| ($ in millions) | Simon | Garfunkel | ||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 640 | $ | 2,940 | ||||
| Short-term investments | 3,610 | 0 | ||||||
| Net receivables | 985 | 1,300 | ||||||
| Inventory | 505 | 201 | ||||||
| Other current assets | 345 | 478 | ||||||
| Total current assets | $ | 6,085 | $ | 4,919 | ||||
| Current liabilities | ||||||||
| Accounts payable | $ | 7,050 | $ | 4,285 | ||||
| Short-term debt | 1,260 | 1,024 | ||||||
| Other current liabilities | 0 | 1,301 | ||||||
| Total current liabilities | $ | 8,310 | $ | 6,610 | ||||
Calculate the acid-test (quick) ratio for Simon. Then calculate the acid-test (quick) ratio for Garfunkel. (Round your answers to 2 decimal places.)
Acid-test (quick) Ratio
Simon ?
Garfunkel ?
Which of the two companies has the best acid-test ratio?
Garfunkel
Simon
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
Study Help