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22 March, 20:27

The fiscal 2016 balance sheet for Whole Foods Market reports the following data (in millions). Cash and Cash Equivalents Marketable Securities Accounts Receivable Merchandise Inventories Current Assets Current Liabilities $351 $379 $242 $517 $1,975 $1,341 What is the company's current ratio? A. 0.69 B. 1.38 C. 0.72 D. 1.47 E. None of the above

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  1. 22 March, 20:50
    0
    Option C 0.72 is correct

    Explanation:

    Cash and cash equivalents 351

    Marketable securities 379

    Accounts receivable 242

    Total quick assets 972

    Divide by Current liabilities 1341

    Quick ratio 0.72
  2. 22 March, 20:51
    0
    D. 1.47

    Explanation:

    The data are limped and should be separated first as follows:

    Cash and Cash Equivalents = $351

    Marketable Securities = $379

    Accounts Receivable = $242

    Merchandise Inventories = $517

    Current Assets = $1,975

    Current Liabilities = $1,341

    To calculate the company's current ratio w divide the current assets by current liabilities as follow:

    Current ratio = $1,975/$1,341 = 1.47

    Therefore, the company's current ratio 1.47. And since it greater than 1, it implies the company will not have problems meeting its short-term debt obligation.
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