Pettijohn Inc.

The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

Balance Sheet (Millions of $)

Assets 2019

Cash and securities $ 1,755.0

Accounts receivable 9,660.0

Inventories 13,440.0

Total current assets $24,855.0

Net plant and equipment 17,745.0

Total assets $42,600.0

Liabilities and Equity

Accounts payable $ 7,980.0

Notes payable 6,080.0

Accruals 4,620.0

Total current liabilities $18,680.0

Long-term bonds 11,080.0

Total liabilities $29,760.0

Common stock 3,500.0

Retained earnings 9,340.0

Total common equity $12,840.0

Total liabilities and equity $42,600.0

Income Statement (Millions of $) 2019

Net sales $58,800.0

Operating costs except depr'n $54,500.0

Depreciation $ 1,029.0

Earnings bef int and taxes (EBIT) $ 2,471.0

Less interest 1,050.0

Earnings before taxes (EBT) $ 1,421.0

Taxes $ 600

Net income $ 821.0

Other data:

Shares outstanding (millions) 175.00

Common dividends $ 509.83

Int rate on notes payable & L-T bonds 6.25%

Federal plus state income tax rate 35%

Year-end stock price $84.78

What is the quick ratio?

• 0.92
• 1.21
• 1.08
• 0.84
• 0.61