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Columbia Sportswear Company reported the following in recent balance sheets (amounts in millions). (in millions) September 30, 2016 December 31, 2015 Assets Current Assets Cash
Columbia Sportswear Company reported the following in recent balance sheets (amounts in millions).
(in millions) | September 30, 2016 | December 31, 2015 | ||||||
Assets | ||||||||
Current Assets | ||||||||
Cash | $ | 529 | $ | 540 | ||||
Accounts Receivable | 1,356 | 542 | ||||||
Inventories | 1,650 | 704 | ||||||
Prepaid Rent | 92 | 51 | ||||||
Total Current Assets | 3,627 | 1,837 | ||||||
Software | 560 | 208 | ||||||
Equipment | 1,909 | 682 | ||||||
Total Assets | $ | 6,096 | $ | 2,727 | ||||
Liabilities and Shareholders' Equity | ||||||||
Liabilities | ||||||||
Current Liabilities | ||||||||
Accounts Payable | $ | 966 | $ | 699 | ||||
Notes Payable (short-term) | 0 | 2 | ||||||
Income Taxes Payable | 91 | 5 | ||||||
Total Current Liabilities | 1,057 | 706 | ||||||
Notes Payable (long-term) | 215 | 123 | ||||||
Total Liabilities | 1,272 | 829 | ||||||
Stockholders Equity | ||||||||
Common Stock | 202 | 62 | ||||||
Retained Earnings | 4,622 | 1,836 | ||||||
Total Shareholders Equity | 4,824 | 1,898 | ||||||
Total Liabilities and Shareholders Equity | $ | 6,096 | $ | 2,727 | ||||
Required:
- 1. Calculate the current ratio at September 30, 2016 and December 31, 2015.
- 2-a. Did the companys current ratio increase or decrease?
- 2-b. What does this imply about the companys ability to pay its current liabilities as they come due?
- 3-a. What would Cumberlands current ratio have been on September 30, 2016, if the company were to have paid down $10 of its Accounts Payable?
- 3-b. Does paying down Accounts Payable in this case increase or decrease the current ratio?
- 4. Are the companys total assets financed primarily by liabilities or stockholders equity at September 30, 2016?
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