GF Foods Company is a large, primarily domestic, consumer foods company involved in the manufacture, distribution, and sale of a variety of food products. Industry averages are derived from Troy’s The Almanac of Business and Industrial Financial Ratios. Following are the 2024 and 2023 comparative balance sheets for IGF. (The financial data we use are from actual financial statements of a well-known corporation, but the company name used is fictitious, and the numbers and dates have been modified slightly.) IGF FOODS COMPANY Comparative Balance Sheets Years Ended December 31, 2024 and 2023 ($ in millions) 2024 2023 Assets Current assets: Cash $ 48 $ 142 Accounts receivable 347 320 Marketable securities 358 – Inventories 914 874 Prepaid expenses 212 154 Total current assets $ 1,879 $ 1,490 Property, plant, and equipment (net) 2,592 2,291 Intangibles (net) 800 843 Other assets 74 60 Total assets $ 5,345 $ 4,684 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 254 $ 276 Accrued liabilities 493 496 Notes payable 518 115 Current portion of long-term debt 208 54 Total current liabilities $ 1,473 $ 941 Long-term debt 534 728 Deferred income taxes 407 344 Total liabilities $ 2,414 $ 2,013 Shareholders’ equity: Common stock 180 180 Additional paid-in capital 21 63 Retained earnings 2,730 2,428 Total shareholders’ equity $ 2,931 $ 2,671 Total liabilities and shareholders’ equity $ 5,345 $ 4,684 Liquidity refers to a company’s cash position and overall ability to obtain cash in the normal course of business. A company is said to be liquid if it has sufficient cash or is capable of converting its other assets to cash in a relatively short period of time so that currently maturing debts can be paid. Required: Calculate the current ratio for IGF for 2024. The average ratio for the stocks listed on the New York Stock Exchange in a comparable time period was 1.5. Calculate IGF’s acid-test or quick ratio for 2024. The ratio for the stocks listed on the New York Stock Exchange in a comparable time period was 0.80.

GF Foods Company is a large, primarily domestic, consumer foods company involved in the manufacture, distribution, and sale of a variety of food products. Industry averages are derived from Troy’s The Almanac of Business and Industrial Financial Ratios. Following are the 2024 and 2023 comparative balance sheets for IGF. (The financial data we use are from actual financial statements of a well-known corporation, but the company name used is fictitious, and the numbers and dates have been modified slightly.) IGF FOODS COMPANY Comparative Balance Sheets Years Ended December 31, 2024 and 2023 ($ in millions) 2024 2023 Assets Current assets: Cash $ 48 $ 142 Accounts receivable 347 320 Marketable securities 358 – Inventories 914 874 Prepaid expenses 212 154 Total current assets $ 1,879 $ 1,490 Property, plant, and equipment (net) 2,592 2,291 Intangibles (net) 800 843 Other assets 74 60 Total assets $ 5,345 $ 4,684 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable $ 254 $ 276 Accrued liabilities 493 496 Notes payable 518 115 Current portion of long-term debt 208 54 Total current liabilities $ 1,473 $ 941 Long-term debt 534 728 Deferred income taxes 407 344 Total liabilities $ 2,414 $ 2,013 Shareholders’ equity: Common stock 180 180 Additional paid-in capital 21 63 Retained earnings 2,730 2,428 Total shareholders’ equity $ 2,931 $ 2,671 Total liabilities and shareholders’ equity $ 5,345 $ 4,684 Liquidity refers to a company’s cash position and overall ability to obtain cash in the normal course of business. A company is said to be liquid if it has sufficient cash or is capable of converting its other assets to cash in a relatively short period of time so that currently maturing debts can be paid. Required: Calculate the current ratio for IGF for 2024. The average ratio for the stocks listed on the New York Stock Exchange in a comparable time period was 1.5. Calculate IGF’s acid-test or quick ratio for 2024. The ratio for the stocks listed on the New York Stock Exchange in a comparable time period was 0.80.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 57P: Grammatico Company has just completed its third year of operations. The income statement is as...

See similar textbooks

Related questions

Question

Following are the 2024 and 2023 comparative balance sheets for IGF. (The financial data we use are from actual financial statements of a well-known corporation, but the company name used is fictitious, and the numbers and dates have been modified slightly.)

IGF FOODS COMPANY
Comparative Balance Sheets Years Ended
December 31, 2024 and 2023
($ in millions)	2024	2023
Assets
Current assets:
Cash	$ 48	$ 142
Accounts receivable	347	320
Marketable securities	358	–
Inventories	914	874
Prepaid expenses	212	154
Total current assets	$ 1,879	$ 1,490
Property, plant, and equipment (net)	2,592	2,291
Intangibles (net)	800	843
Other assets	74	60
Total assets	$ 5,345	$ 4,684
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$ 254	$ 276
Accrued liabilities	493	496
Notes payable	518	115
Current portion of long-term debt	208	54
Total current liabilities	$ 1,473	$ 941
Long-term debt	534	728
Deferred income taxes	407	344
Total liabilities	$ 2,414	$ 2,013
Shareholders’ equity:
Common stock	180	180
Additional paid-in capital	21	63
Retained earnings	2,730	2,428
Total shareholders’ equity	$ 2,931	$ 2,671
Total liabilities and shareholders’ equity	$ 5,345	$ 4,684

Liquidity refers to a company’s cash position and overall ability to obtain cash in the normal course of business. A company is said to be liquid if it has sufficient cash or is capable of converting its other assets to cash in a relatively short period of time so that currently maturing debts can be paid.

Required:

Calculate the current ratio for IGF for 2024. The average ratio for the stocks listed on the New York Stock Exchange in a comparable time period was 1.5.
Calculate IGF’s acid-test or quick ratio for 2024. The ratio for the stocks listed on the New York Stock Exchange in a comparable time period was 0.80.

AI-Generated Solution

AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.

Unlock instant AI solutions

Tap the button
to generate a solution

Click the button to generate
a solution

SEE SOLUTION