Sherwood, Inc., the parent company of Tasty snack foods and Super beverages, had
ID: 2375874 • Letter: S
Question
Sherwood, Inc., the parent company of Tasty snack foods and Super beverages, had the following current assets and current liabilities at the end of two recent years:
a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place.
Dec. 26, 2009(in millions) Dec. 27, 2008
(in millions) Cash and cash equivalents $3,126 $2,855 Short-term investments, at cost 2,220 5,302 Accounts and notes receivable, net 7,059 5,439 Inventories 1,861 3,308 Prepaid expenses and other current assets 620 1,224 Short-term obligations 331 3,512 Accounts payable and other current liabilities 7,831 7,161 Income taxes payable 108 657
Explanation / Answer
2009
curent liabilities = 7059 + 7831 +331 +2220 +108=17549
current assest = 3126 + 1861 + 620 = 5607
current ratio = 5607//17549 = 0.3195
quick ratio = (5607 - 1861)/17549 = 0.213459
2008
current liabilities = 5302 + 5439 +3512 + 7161 + 657 = 22071
current assests = 2855 + 3308 + 1224 = 7387
current ratio = 0.33469
quick ratio = (7387 - 3308)/22071 = 0.1848
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