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Presented below are summary financial data from Porter’s annual report: Amounts in millions Balance Sheet Cash and Cash Equivalents $1,850 Marketable Securities 19,100 Accounts Receivable (net) 9,367 Total Current Assets 39,088 Total Assets 123,078 Current Liabilities 38,450 Long-Term Debt 7,279 Shareholders’ Equity 68,278 Income Statement Interest Expense 400 Net Income Before Taxes 14,007

Calculate the following ratios: (Round to 2 decimal points)
a. Times-interest-earned ratio
b. Quick ratio Answer
c. Current ratio

Respuesta :

Answer:

(a) 36.02 times

(b) 0.7884

(c) 1.02

Explanation:

(a) Times interest earned ratio:

= (Net income before taxes + interest expense) ÷ interest expense

= (14,007 + 400) ÷ 400

= 36.02 times

(b) Quick ratio:

= (cash and cash equivalents + marketable securities + accounts receivable) ÷ current liabilities

= (1,850 + 19,100 + 9,367) ÷ 38,450

= 0.7884

(c) Current ratio = current assets ÷ current liabilities

                          = 39,088 ÷ 38,450

                          = 1.02

                       

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