Current Position Analysis

Current Position Analysis Sherwood, Inc., the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years: Current Year Previous Year (in millions) (in millions) Cash and cash equivalents $2,647 $2,790 Short-term investments, at cost 1,880 5,181 Accounts and notes receivable, net 5,977 5,313 Inventories 1,818 1,616 Prepaid expenses and other current assets 606 598 > Short-term obligations 323 3,432 Accounts payable 7,757 7,638 a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place. Current Year Previous Year :1 [:1 :1 :1 b. The liquidity of Sherwood has increased 4 some over this time period. Both the current and quick ratios have increased J . Sherwood is a strong V 1. Current ratio 2. Quick ratio company with ample J resources for meeting short-term obligations. Its liquidity as measured by the current and quick ratios has improved J during this period. Feedback V