The current assets and current liabilities for Apple Inc. and HP, Inc., are as follows at the
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The current assets and current liabilities for Apple Inc. and HP, Inc., are as follows at the end of a recent fiscal period:
* These represent prepaid expense and other non-quick current assets.
a. Determine the quick ratio for both companies. Round to one decimal place.
b. Interpret the quick ratio difference between the two companies.
Transcribed Image Text:
HP, Inc. Apple Ind. (in millions) in millions) $17,433 16,281 11,588 Current assets: Cash and cash equivalents Short-term investments Accounts receivable Inventories Other current assets* $21,120 20,481 35,889 0 2,349 6,485 9,539 $89,378 Total current assets $51,787 Current liabilities: Accounts payable Accrued and other current liabilities $60,671 19,939 $80,610 $32,418 9,773 42,191 Total current liabilities
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a Quick Ratio Quick Assets Current Liabilities b It is clear that Apple Incs shortterm liquidity is stronger than HPs Apples quick ratio is 25 10 08 08 higher Apple has a much stronger relative shortterm investment position than does HP Apples cash accounts receivable and shortterm investments are over 86 of total current assets 100 of current liabilities compared to HPs 65 of total current assets 80 of current liabilities A quick ratio of 10 for Apple suggests ample flexibility to make strategic investments with its excess cash while a quick ratio of 08 for HP indicates an efficient but tight quick asset management policy Apple Inc ...View the full answer
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Related Book For
Accounting
ISBN: 978-1337899451
27th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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