The options for #2 include: 1) strong, weak 2) over 2, under 2 3) is not suffici

Question

The options for #2 include: 1) strong, weak 2) over 2, under 2 3) is not sufficient, is sufficient Option for #3: Check My Work (3 remai eBook Exercise 8-72 Ratio Analysis Intel Corporation provided the following information on its balance sheet and statement of cash flows: S8,514,000,000 Inventories s 4,314,000,000 2,146,000,000 10,620,000,000 Current liabilities Cash and equivalents Marketable securities Receivables 6,598,000,000 3,404,000,000 2,709,000,000 Other current assets Cash flows from operating activities Required: If required, round your answers to two decimal places 1. Calculate the following: a. Current ratio b. Quick ratio c. Cash ratio d. Operating cash flow ratio 2. Conceptual Connection: Interpret these results. The current ratio appears to be select strong because as a general rule of thumb, a current ratio! select ? is considered good. The operating cash flow ratio indicates that the cash that the company is generating Select to meet the current liabilities indicates that the cash that the company is generating Select 3. Conceptual Connection: Assume that Intel, as a requirement of one of its loans, must maintain a current ratio of at least 2.30. Given the large amount of cash, how could Intel accomplish this on December 31? Use some of the cash Select Specifically, how much cash must Intel use to pay down the current liabilities in order to achieve a current ratio of 2.30? In your calculations and final answer, use amounts in millions, rounded to two decimal places (for example: 15,142.53 instead of 15,142,530,000). smillion

Explanation / Answer

Working - current ratio calculation

Current ratio = current asset/Current Liabilities

Current ratio = ($6598000000+$3404000000+$2709000000+$4314000000+$2146000000)/$8514000000

Current Ratio = ($19165000000/$8514000000)

Current ratio = 2.25

Answer 2) strong, over 2, is sufficient (since current ratio is higher than 2 and cash flow from operating activity is higher that current liabilities)

Answer 3) to pay off of some of current liabilities. (That will maintain current ratio otherwise by investing in fixed assets or non current investments current ration will get reduced)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.