The following data (in thousands) were taken from recent financial statements of Starbucks Corporation: a. Compute the
Question:
The following data (in thousands) were taken from recent financial statements of Starbucks Corporation:
a. Compute the working capital and the current ratio as of September 30, 2007 and October 1, 2006. Round to two decimal places.b. What conclusions concerning the company's ability to meet its financial obligations can you draw from part(a)?
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Sept. 30, 2007 $1,696,487 2,155,566 Oct. 1, 2006 Current assets Current liabilities $1,529.788 1,935,620
Step by Step Answer:
a Working capital 2006 405832 15297881935620 2007 459079 16964872155566 Ce...View the full answer
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Related Video
The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.
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