Given below is information for Short Corporation and Long Computers,Inc.at the end of 2017.
?
$\begin{array}{lrr}\text { (inmillions) }&\text { Short }&\text { Long }\
\text { Cash and cash equival ents } & \$ 1,100 & \$ 300 \
\text { Short-term investments/marketable securities } & 100 & 900 \
\text { Accounts, notes, and other receivables, net } & 11,700 & 12,400 \
\text { Inventories } & 1,200 & 1,000 \
\text { Prepaid expenses } & 1,400 & 600\\text { Total current assets } & \$ 15,500 & \$ 15,200 \
\text { Current liabilities } & \$ 5,000 & \$ 4,000 \
\text { Other liabilities } & \$ 2,300 & \$ 12,000 \
\text { Stockhol ders' equity } & \$ 5,300 & \$ 7,300
\end{array}$ 1) Using the information provided above, compute the following for each company at December 31, 2018 :
A. Current ratio
B. Acid-test ratio
2) Comment briefly on the liquidity of each of these two companies. Which appears to be more liquid?
3) What other ratios would help you to more fully assess the liquidity of these companies?

Question

Given below is information for Short Corporation and Long Computers,Inc.at the end of 2017.
?
 $\begin{array}{lrr}\text { (inmillions) }&\text { Short }&\text { Long }\
\text { Cash and cash equival ents } & \$ 1,100 & \$ 300 \
\text { Short-term investments/marketable securities } & 100 & 900 \
\text { Accounts, notes, and other receivables, net } & 11,700 & 12,400 \
\text { Inventories } & 1,200 & 1,000 \
\text { Prepaid expenses } & 1,400 & 600\\text { Total current assets } & \$ 15,500 & \$ 15,200 \
\text { Current liabilities } & \$ 5,000 & \$ 4,000 \
\text { Other liabilities } & \$ 2,300 & \$ 12,000 \
\text { Stockhol ders' equity } & \$ 5,300 & \$ 7,300
\end{array}$ 1) Using the information provided above, compute the following for each company at December 31, 2018 :
A. Current ratio
B. Acid-test ratio
2) Comment briefly on the liquidity of each of these two companies. Which appears to be more liquid?
3) What other ratios would help you to more fully assess the liquidity of these companies?

Quizplus · Accepted Answer

The Answer of Given below is information for Short Corporation and Long Computers,Inc.at the end of 2017.
?
 $\begin{array}{lrr}\text { (inmillions) }&\text { Short }&\text { Long }\
\text { Cash and cash equival ents } & \$ 1,100 & \$ 300 \
\text { Short-term investments/marketable securities } & 100 & 900 \
\text { Accounts, notes, and other receivables, net } & 11,700 & 12,400 \
\text { Inventories } & 1,200 & 1,000 \
\text { Prepaid expenses } & 1,400 & 600\\text { Total current assets } & \$ 15,500 & \$ 15,200 \
\text { Current liabilities } & \$ 5,000 & \$ 4,000 \
\text { Other liabilities } & \$ 2,300 & \$ 12,000 \
\text { Stockhol ders' equity } & \$ 5,300 & \$ 7,300
\end{array}$ 1) Using the information provided above, compute the following for each company at December 31, 2018 :
A. Current ratio
B. Acid-test ratio
2) Comment briefly on the liquidity of each of these two companies. Which appears to be more liquid?
3) What other ratios would help you to more fully assess the liquidity of these companies?

Given Below Is Information for Short Corporation and Long Computers,Inc