Key figures for the recent two years of both Apple and Google follow. Required 1. Compute the
Question:
Key figures for the recent two years of both Apple and Google follow.
Required
1. Compute the current ratio for both years for both companies.
2. Which company has the better ability to pay short-term obligations according to the current ratio?
3. Analyze and comment on each company’s current ratios for the past two years.
4. How do Apple’s and Google’s current ratios compare to their industry (assumed) average ratio of 2.0?
Apple Google ($ millions) Current assets. Current liabilities ..W Current Year Prior Year Current Year Prior Year $73,286 43.658 $57,653 38,542 $72,886 15,908 $60,454 14,337
Step by Step Answer:
1 Apples current ratios in millions Current year 73286 43658 168 Prior year 57653 38542 150 Googles ...View the full answer
Fundamental Accounting Principles
ISBN: 978-0077862275
22nd edition
Authors: John Wild, Ken Shaw, Barbara Chiappetta
Related Video
The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.
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