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Short-Term Liquidity Ratios

The financial statements for Puck Enterprises, a retailer, follow.

Puck Enterprises
Consolidated Income Statements
(millions of dollars except per share data)
		December 31
		2023		2022		2021
Revenues		$19,233		$17,927		$16,115
Costs and expenses:
Cost of retail sales, buying, and occupancy		$14,164		$13,129		$11,751
Selling, publicity, and administration		3,175		2,978		2,801
Depreciation		498		459		410
Interest expense, net		446		437		398
Taxes other than income taxes		343		313		283
Total costs and expenses		$18,626		$17,316		$15,643
Earnings before income taxes		$607		$611		$472
Provision for income taxes		232		228		171
Net earnings		$375		$383		$301

Puck Enterprises
Consolidated Balance Sheets
(Millions of dollars)
		December 31,
		2023		2022
ASSETS
Current assets:
Cash and cash equivalents		$321		$117
Accounts receivable		1,536		1,514
Merchandise inventories		2,497		2,618
Other		157		165
Total current assets		$4,511		$4,414
Property and equipment:
Land		$1,120		$998
Buildings and improvements		4,753		4,342
Fixtures and equipment		2,162		2,197
Construction-in-progress		248		223
Accumulated depreciation		(2,336)		(2,197)
Net property and equipment		$5,947		$5,563
Other		320		360
Total assets		$10,778		$10,337
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable		$200		$23
Accounts payable		1,654		1,596
Accrued liabilities		903		849
Income taxes payable		145		125
Current portion of long-term debt		173		371
Total current liabilities		$3,075		$2,964
Long-term debt		4,279		4,330
Deferred income taxes and other		536		450
Loan to ESOP		(217)		(267)
Total liabilities		$7,673		$7,477
Stockholders' equity:
Preferred stock		$368		$374
Common stock		72		71
Additional paid-in capital - common		73		58
Retained earnings		2,592		2,357
Total stockholders' equity		$3,105		$2,860
Total liabilities and stockholders' equity		$10,778		$10,337

Required:

1. Compute the four short-term liquidity ratios for 2022 and 2023 assuming operating cash flows are $281 million and $430 million, respectively. Round your answers to two decimal places.

	2023	2022
Current ratio
Quick ratio
Cash ratio
Operating cash flow ratio

2. Conceptual Connection: Indicate which ratio appears to be most appropriate for a retail organization.

current ratioquick ratiocash ratio