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5. EX.12.78.ALGO (Algorithmic) Exercise 12-78 (Algorithmic) Short-Term Liquidity Ratios The financial statements for Giardi Corporation, a retailer, follow. Giardi Corporation Consolidated Income Statements (Millions of
5. EX.12.78.ALGO (Algorithmic) Exercise 12-78 (Algorithmic) Short-Term Liquidity Ratios The financial statements for Giardi Corporation, a retailer, follow. Giardi Corporation Consolidated Income Statements (Millions of dollars, except per share data) December 31 2019 2018 2017 Revenues $19,233 $17,927 $16,115 $14,164 3,175 Costs and expenses: Cost of retail sales, buying, and occupancy Selling, publicity, and administration Depreciation Interest expense, net Taxes other than income taxes $13,129 2,978 459 $11,751 2,801 498 410 446 437 398 343 313 283 Total costs and expenses $18,626 $17,316 $15,643 Earnings before income taxes $607 $611 $472 Provision for income taxes 232 228 171 Net earnings $375 $383 $301 Giardi Corporation Consolidated Balance Sheets (Millions of dollars) December 31, 2019 2018 ASSETS Current assets: $321 Cash and cash equivalents Accounts receivable $117 1,514 1,536 Merchandise inventories 2,497 2,618 Other 157 165 Total current assets $4,511 $4,414 Property and equipment: Land $998 Buildings and improvements 4,342 2,197 Fixtures and equipment 223 Construction-in-progress Accumulated depreciation $1,120 4,753 2,162 248 (2,336) $5,947 320 $10,778 (2,197) $5,563 Net property and equipment Other 360 $10,337 Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable Accounts payable $200 $23 1,654 1,596 849 Accrued liabilities 903 145 125 173 371 Income taxes payable Current portion of long-term debt Total current liabilities Long-term debt Deferred income taxes and other 53.03 $3,075 $2,964 4,330 ,279 536 450 Loan to ESOP (217) $7,673 (267) $7,477 Total liabilities Stockholders' equity: Preferred stock $368 $374 Common stock 72 71 Additional paid-in capital - common Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 73 58 2,592 2,357 $3,105 $2,860 $10,778 $10,337 Required: 1. Compute the four short-term liquidity ratios for 2018 and 2019 assuming operating cash flows are $281 million and $450 million, respectively. Round your answers to two decimal places. 2019 2018 Current ratio Quick ratio Cash ratio Operating cash flow ratio 2. Conceptual Connection: Indicate which ratio appears to be most appropriate for a retail organization
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