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 $7,704 Short-term investments 4,144 Accounts receivable, net 6,716 Inventories 8,674 Deferred income taxes 389 Prepaid expenses and other current assets 1,968 Total current assets $29,595 Current liabilities Current portion of long-term debt $214 Notes payable 148 Accounts payable 4,262 Accrued liabilities 3,951 Income taxes payable 71 Total current liabilities $8,646

Ratio Numerator Denominator Result 1. Current ratio X X =

Ratio Numerator Denominator Result 2. Quick ratio X X =