Question

Based on the information below please calculate the Current ration, Quick (Acid Test) Ration, and Current...

Based on the information below please calculate the Current ration, Quick (Acid Test) Ration, and Current Cash Debt Coverage:

Company Name Symbol Year Industry Current Ratio Quick (Acid Test) Ratio Current Cash Debt Coverage Accounts Receivable Turnover Inventory Turnover Asset Turnover
3M co MMM 2017 Diversified Industry

3M Co

Net Sales $31,657; Net Income $4,869; Non-controlling $11; Net Income - Controlling $4,858; COGS $16,001; Total Assets $37,987

Last Year Total Assets $32,906; Total Liabilities $26,365; Last Year Total Liabilities $22,563; Total equity $11,622; Last Year Total Equity $10,343

Total Current Assets $14,277; Non-Current Assets $23,710; Current Liabilities $7,687; Last Year Current Liabilities $6,219; Non-current Liabilities $18,678

Accounts Receivable Net $4,911; Last Year Accounts Receivable Net $4,392; Cash $3,053; Short-Term Investments $1,076; Current Inventory $4,034

Last Year Inventory $3,385; Net Cash Provided by Operating Activities $6,240; Cash Dividends $(2,803); Preferred Div. $-; Preferred Stockholders' Equity $-;

Last Year Preferred Stockholders' Equity $-; Common Stockholders' Equity $11,622; Last Year Common Stockholders' Equity $10,343;

Market Price (1/2/2018) $235.78; Interest Expense $322; Income Tax Expense $2,679; CapEx $(1,373); Shares Outstanding $595,500,000

Shares Outstanding / 1,000,000 = $595.50; Weighted Average Common Shares Outstanding $597.50; Goodwill $10,513

Please explain how did you get your answers for the calculation of ratios, and for the calculation of turnovers

Business   Accounting   
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Homework Answers

Answer #1

Ans:

1. Current ratio= Current Assets/Current Liabilities

Current Assets= 14,277

Current Liabilities= 7,687

ratio= 14,277/7,687

=> 1.86:1

2. Quick Test ratio= Quick Assets/Current Liabilities

Quick Assets= Current Assets-Inventories-prepaid expenses

Quick Assets= 14,277-4,034

=> 10,243

Current Liabilities= 7,687

Ratio= 10,243/7,687

=> 1.33:1

3. Accounts receivable= Net Credit Sales/Average Accounts Receivable

Average Accounts receivable= Opening+ closing/2

=> 4,911+4,392/2

=> $4,651.50

Net Credit Sales= 31,657

Ratio= 31,657/4,651.50

=> 6.80 times

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