What are the firm's current ratios for 2018 and 2019? Income Statements ($ in millions) Balance Sheets ($ in millions) 2018 2019 | Assets 2018 2019 $1,265 | Cash $780 | Short-Term investments $92 | Accounts rec. Sales Revenue $1,180 $35 $20 Less: Cost of goods sold Less: Operating Expenses Less: Depreciation Earnings before interest and taxes Less: Interest paid $660 $20 $5 $75 190 235 $40 $50 | Inventory 250 300 $405 $343 Total Current Assets $495 $560 $170 $150 | Net fixed assets 990 1,105 Taxable Income $235 $193 Less: Taxes (40%) $94 $77 Total assets $1,485 1,665 Net income $141 $116 Liabilities and Owner's Equity Dividends (45%) Additions to Retained Earnings $63 $52 2018 2019 $78 $64 Accounts payable $125 $100 Accruals $10 $10 Notes payable 35 40 Total Current Liabilities $170 $150 Long-term debt Total Liabilities 598 790 $768 554 $940 498 Common stock Retained earnings Total Equity Total liab.& equity 163 $227 717 $725 $1,485 $1,665

What are the firm's current ratios for 2018 and 2019? Income Statements ($ in millions) Balance Sheets ($ in millions) 2018 2019 | Assets 2018 2019 $1,265 | Cash $780 | Short-Term investments $92 | Accounts rec. Sales Revenue $1,180 $35 $20 Less: Cost of goods sold Less: Operating Expenses Less: Depreciation Earnings before interest and taxes Less: Interest paid $660 $20 $5 $75 190 235 $40 $50 | Inventory 250 300 $405 $343 Total Current Assets $495 $560 $170 $150 | Net fixed assets 990 1,105 Taxable Income $235 $193 Less: Taxes (40%) $94 $77 Total assets $1,485 1,665 Net income $141 $116 Liabilities and Owner's Equity Dividends (45%) Additions to Retained Earnings $63 $52 2018 2019 $78 $64 Accounts payable $125 $100 Accruals $10 $10 Notes payable 35 40 Total Current Liabilities $170 $150 Long-term debt Total Liabilities 598 790 $768 554 $940 498 Common stock Retained earnings Total Equity Total liab.& equity 163 $227 717 $725 $1,485 $1,665

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 54CE

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