135. The Copper Grillhas the following current assets: cash, $12 million; receivables, $50 million; inventory, $44 million; and other current assets $4 million. The Copper Grillhas the following liabilities: accounts payable, $38 million; current portion of long-term debt, $7 million; and long-term debt, $12 million. Based on these amounts, calculate the current ratio and the acid-test ratio for The Copper Grill.
136. Selected financial data regarding current assets and current liabilities for two competing companies, Simon and Garfunkel, are provided as follows:
($ in millions)
Simon
Garfunkel
Current assets
Cash and cash equivalents
$648
$2,917
Short-term investments
3,676
Net receivables
991
1,372
Inventory
515
202
Other current assets
334
476
Total current assets
$6,164
$4,967
Current liabilities
Accounts payable
$7,081
$4,295
Short-term debt
1,239
1,021
Other current liabilities
1,308
Total current liabilities
$8,320
$6,624
1. Calculate the current ratio for Simon. Then calculate the current ratio for Garfunkel. Which of the two companies has the best current ratio?
2. Calculate the acid-test (quick) ratio for Simon. Then calculate the acid-test (quick) ratio for Garfunkel. Which of the two companies has the best acid-test ratio?
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