Assets 2017 2016 2015 Crrent assets: Cash and cash equivalents 446 $ 434 8,677 6

Question

Assets 2017 2016 2015 Crrent assets: Cash and cash equivalents 446 $ 434 8,677 631 767 210 Curent investments Securities lending collateral Broker receivables Due from associated medical groups Accounts receivable net Inventories and other curent assets 7,494 1.062 679 78 2.337 1.605 13.701 816 2,030 1,357 13,908 25,756 24,342 1.422 12.041 26,189 23,782 585 Total curent assets Noncurent investments Land, buildings, equipment, and software net 28,766 25,018 291 Other acquired intangible assets Other long-term assets 628 Total assets 68.720 $ 64.613 S 62.597 Liabilities and Owner's Equity 2017 2016 2015 Current liabilities: 3.852 1.862 862 1.828 2.977 1.750 Medical claims payable Due to associated medical groups Payroll and related charges Medicare payments received in advance Securities lending paya Broker payables Long-term debt subject to short-term remarketing 3.739 2.282 830 1.859 1.324 1.068 1.160 ble 631 849 1.329 arrangements net Other current debt Other current liabilities 732 775 2.027 12.967 785 1.756 2.421 17,387 4.757 6,675 8,278 2,501 39.598 29.122 2.102 Total current liabilities 14.675 4,754 6,566 9.148 2,380 37.523 Long-term debt Physicians' retirement plan liability Pension and other retirement liabilities 5.730 10.525 2.418 37.700 24.897 62.597 Other long-tem labilities Total liabilities Owner's Equity Total liabilities and net worth 68.720 S 64.613 S

Explanation / Answer

Note that current ratio = all current assets/current liabilities

Quick ratio or acid test ratio = quick asset/current liabilities

Quick asset = current asset- inventory

Current ratio shows ability of org. To meet short term obligation as and when they arise

Quick ratio is more rigorous than current ratio as it shows ability of org to meet it's short term obligation with readily available cash. Inventory takes time to be disposed off and also their realization value can't be guaranteed.

Note that quick ratio and current ratio are one and the same thing.

Now let us move to the calculation part

First let us calculate current ratio for three years

2015 :- 12041/12967 = 0.929

2016 :- 13908/14675 = 0.948

2017 :- 13701/17387 = 0.788

Now quick asset

2015 :- (12041-1422)/12967 = 0.819

2016 :- (13908-1357)/14675 = 0.855

2017 :- (13701-1605)/17387 = 0.696

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