Current Position Analysis Sherwood, Inc., the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years:   Current Year (in millions) Previous Year (in millions) Cash and cash equivalents $2,419   $2,589   Short-term investments, at cost 1,718   4,809   Accounts and notes receivable, net 5,463   4,932   Inventories 2,250   2,400   Prepaid expenses and other current assets 750   888   Short-term obligations 240   2,548   Accounts payable 5,760   5,672   a.  Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place.   Current Year Previous Year 1.  Current ratio fill in the blank 1 fill in the blank 2 2.  Quick ratio fill in the blank 3 fill in the blank 4 b.  The liquidity of Sherwood has increased  some over this time period. Both the current and quick ratios have increased . Sherwood is a strong  company with ample  resources for meeting short-term obligations. Its liquidity as measured by the current and quick ratios has improved  during this period.

Question

Current Position Analysis

Sherwood, Inc., the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years:

  Current Year
(in millions)
Previous Year
(in millions)
Cash and cash equivalents $2,419   $2,589  
Short-term investments, at cost 1,718   4,809  
Accounts and notes receivable, net 5,463   4,932  
Inventories 2,250   2,400  
Prepaid expenses and other current assets 750   888  
Short-term obligations 240   2,548  
Accounts payable 5,760   5,672  

a.  Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place.

  Current Year Previous Year
1.  Current ratio fill in the blank 1 fill in the blank 2
2.  Quick ratio fill in the blank 3 fill in the blank 4

b.  The liquidity of Sherwood has increased  some over this time period. Both the current and quick ratios have increased . Sherwood is a strong  company with ample  resources for meeting short-term obligations. Its liquidity as measured by the current and quick ratios has improved  during this period.

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