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

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!