Selected financial data regarding current assets and current liabilities for Royal Caribbean Cruises, Ltd., a leader in the cruise line industry, is provided:
($ in millions)
Current assets:
Cash and cash equivalents ................................ $ 403
Current investments ....................................... 82
Net receivables ............................................. 271
Inventory ................................................... 96
Other current assets ....................................... 125
Total current assets ........................................ $ 977
Current liabilities:
Accounts payable ......................................... $1,061
Short-term debt ............................................ 644
Other current liabilities ................................... 969
Total current liabilities ................................... $2,674
Required:
1. Calculate the current ratio and the acid-test ratio for Royal Caribbean.
2. Compare your calculations with those for United Airlines and Southwest Airlines reported in the chapter text. Which company appears more likely to have difficulty paying its currently maturing debts?