Question: You are given the data for company A below. Analyze the liquidity of the company in 2019 and 2020 using the cash ratio, current ratio,
You are given the data for company A below. Analyze the liquidity of the company in 2019 and 2020 using the cash ratio, current ratio, and quick ratio. Has liquidity improved over time? Include your calculations.
| Balance Sheet | 2019 | 2020 |
| Current Assets |
|
|
| Cash and Equivalents | 536.0 | 2,825.0 |
| Accounts Receivable - Trade | 2,345.0 | 2,398.0 |
| Inventories | 2,579.0 | 2,743.0 |
| Prepaid Expenses and Other | 1,120.0 | 891.0 |
| Restricted Cash (Short-Term) | 54.0 | 92.0 |
| Short-Term Investments | 30.0 | 20.0 |
| Total Current Assets | 6,664.0 | 8,969.0 |
| Noncurrent Assets |
|
|
| Property Plant & Equipment - Net | 5,659.0 | 5,923.0 |
| Other Intangible Assets | 500.0 | 560.0 |
| Goodwill | 23,376.0 | 23,620.0 |
| Other Noncurrent Assets | 1,088.0 | 1,687.0 |
| Customer Lists/Contracts | 3,424.0 | 3,107.0 |
| Research & Development - Net | 11,054.0 | 10,146.0 |
| Total Assets | 51,765.0 | 54,012.0 |
| Current Liabilities |
|
|
| Accounts Payable - Trade | 1,092.0 | 1,355.0 |
| Short-Term Borrowings | 1,309.0 | 707.0 |
| Accrued Compensation/Postretirement Obligation | 987.0 | 993.0 |
| Accrued Expenses | 2,127.0 | 2,638.0 |
| Income Taxes Accrued/Payable | 140.0 | 143.0 |
| Total Current Liabilities | 5,655.0 | 5,836.0 |
| Non Current Liabilities |
|
|
| Long Term Debt | 18,081.0 | 17,224.0 |
| Pension/Postretirement Liabilities | 1,272.0 | 1,435.0 |
| Other Noncurrent Liabilities | 5,676.0 | 5,752.0 |
| Stockholder Equity |
|
|
| Preferred Stock | 2.0 | 2.0 |
| Common Stock | 347.0 | 365.0 |
| Additional Paid In Capital | 16,270.0 | 19,270.0 |
| Treasury Stock (Amount) | -6,190.0 | -6,138.0 |
| Deferred Compensation (Stockholders Equity) | 23.0 | 23.0 |
| Accumulated Other Comprehensive Income | -2,284.0 | -2,548.0 |
| Retained Earnings (Accumulated Deficit) | 12,913.0 | 12,791.0 |
| Par Value | 1.00 | 1.00 |
| Treasury Shares (Number) | 76.3 | 74.6 |
| Shares Issued | 346.7 | 364.6 |
| Total Shareholders Equity | 21,081.0 | 23,765.0 |
| Shares Authorized | 640.0 | 640.0 |
| Total Liabilities and Shareholders Equity | 51,765.0 | 54,012.0 |
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