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?

Question

Clara Bautista

Business

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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Answers (1)

Know the Answer?

Tony Lawson · Answer 1

(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.