Suppose 3M Company reported the following financial data for 2017 and 2016

(in millions).

Instructions

(a) Calculate the current ratio for 3M for 2017 and 2016.

(b) Suppose that at the end of 2017, 3M management used $300 million cash to pay off $300 million of accounts payable. How would its current ratio change?

Transcribed Image Text:

3M COMPANY Balance Sheet (partial) 2017 2016 Current assets Cash and cash equivalents $ 3,040 $1,849 Accounts receivable, net 3,250 3,195 Inventories 2,639 3,013 Other current assets 1,866 1,541 Total current assets $10,795 $9,598 Current liabilities $ 4,897 $5,839