Calculating Liquidity Ratios

Calculating Liquidity Ratios Compute the (1) current ratio and the (2) quick ratio for Nike Inc. using the following excerpt from the balance sheet reported in a recent 10-K of Nike Inc. At May 31 (in millions) Current assets Cash and equivalents Short-term investments Accounts receivable, net Inventories Deferred income taxes $6,934 3,730 6,044 7,807 389 Prepaid expenses and other current assets 1 ,968 Total current assets Current liabilities Current portion of long-term debt Notes payable Accounts payable Accrued liabilities Income taxes payable Total current liabilities Ratio Numerator $26,872 $193 133 3,836 3,951 71 $8,1 84 Denominator 8,184 1. 2. Current ratio $ 26,872 Ratio Numerator Quick ratio $ 24,515 x Denominator 8,184 Result 3.28 Result 3