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5 March, 01:14

In December 2015 , Apple had cash of $ 37.69 billion, current assets of $ 75.91 billion, and current liabilities of $ 76.31 billion. It also had inventories of $ 2.45 billion. (a) What was Apple's current ratio? (b) What was Apple's quick ratio? (c) In January 2016 , Hewlett-Packard had a quick ratio of 0.66 and a current ratio of 0.90. What can you say about the asset liquidity of Apple relative to Hewlett-Packard?

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  1. 5 March, 01:18
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    (a) 0.99

    (b) 0.96

    (c) Apple has better liquidity

    Explanation:

    (a) Apple's current ratio:

    = Current assets : Current liabilities

    = $ 75.91 billion : $ 76.31 billion

    = 0.99

    (b) Apple's quick ratio:

    = (Current assets - Inventory) : Current liabilities

    = ($ 75.91 billion - $ 2.45 billion) : $ 76.31 billion

    = 0.96

    (c) In January 2016 ,

    Quick ratio = 0.66

    Current ratio = 0.90

    In comparison to H-P assets quality Apple has much better quality. Current ratio and quick ratio of apple is better than H-P which shows that apple has better liquidity than H-P.
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