Liquidity Analyses for McDonald’s and Wendy’s/Arby’s Group The following information was summarized from the balance sheets of McDonald’s Corporation at December 31, 2008, and Wendy’s/Arby’s Group, Inc., at December 28, 2008.

McDonald’s Wendy’s/Arby’s Group

(in millions) (in thousands)

Current Assets:

Cash and cash equivalents $ 2,063.4 $ 90,090 Restricted cash equivalents 0 20,792 Accounts receivable and notes receivable, net 931.2 97,258 Inventories 111.5 24,646 Prepaid expenses and other current assets 411.5 28,990 Deferred income tax benefi t 0 37,923 Advertising fund restricted assets 81,139 Total current assets $ 3,517.6 $ 380,838 Current liabilities $ 2,537.9 $ 502,489 Noncurrent liabilities $ 12,541.0 $1,759,840 Shareholders’ equity $13,382.6 $2,383,291 Required 1. Using the information provided, compute the following for each company at year-end:

a. Working capital

b. Current ratio

c. Quick ratio 2. Comment briefl y on the liquidity of each of these two companies. Which appears to be more liquid?

AppendixLO1