Analysis and Interpretation of Liquidity and Solvency Balance sheets and income statements for 3M Company follow. 3M COMPANY Consolidated Statements of Income For Years Ended December 31 ($ millions) Net sales Operating expenses Cost of sales Selling, general and administrative expenses Research, development and related expenses Gain on sale of businesses Total operating expenses Operating income Other expense, net* 2018 2017 $32,765 $31,657 16,682 16,055 7,602 6,626 1,821 1,870 (547) (586) 25,558 23,965 7,207 7,692 207 144 Income before income taxes 7,000 7,548 Provision for income taxes 1,637 2,679 Net income including noncontrolling interest 5,363 4,869 Less: Net income attributable to noncontrolling interest 14 11 Net income attributable to 3M $5,349 $4,858 * Interest expense, gross is $350 million in 2018 and $322 million in 2017. 3M COMPANY Consolidated Balance Sheets At December 31 ($ millions) 2018 Current assets Cash and cash equivalents Marketable securities Accounts receivable Total inventories Prepaids Other current assets Total current assets Property, plant and equipment, net Goodwill Intangible assets-net Other assets Total assets Current liabilities 2017 $2,853 $3,053 380 1,076 5,020 4,911 4,366 4,034 741 937 349 266 13,709 14,277 8,738 8,866 10,051 10,513 2,657 2,936 1,345 1,395 $36,500 $37,987 Short-term borrowings and current portion of long-term debt $1,211 $1,853 Accounts payable 2,266 1,945 Accrued payroll 749 870 Accrued income taxes 243 310 Other current liabilities 2,775 2,709 Total current liabilities 7,244 7,687 Long-term debt 13,411 12,096 Pension and postretirement benefits 2,987 3,620 Other liabilities 3,010 2,962 Total liabilities $26,652 $26,365 3M Company shareholders' equity Common stock par value 9 Additional paid-in capital 5,643 5,352 Retained earnings 40,636 39,115 Treasury stock (29,626) (25,887) Accumulated other comprehensive income (loss) (6,866) (7,026) Total 3M Company shareholders' equity Noncontrolling interest Total equity Total liabilities and equity 9,796 11,563 52 59 9,848 11,622 $36,500 $37,987 Required a. Compute the current ratio and quick ratio for 2018 and 2017. Note: Round your answers to two decimal places (for example, enter 6.78 for 6.77555). Current ratio Quick ratio 2018 2017 1.86 1.89 1.09 x 1.04 x b. Compute times interest earned and liabilities-to-equity ratios for 2018 and 2017. Note: Round your answers to two decimal places (for example, enter 6.78 for 6.77555). Times interest earned Liabilities-to-equity 2018 25.91 x 2.71 2017 33.81 x 2.27