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Calculate current ratio and quick ratio for both companies

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Reference no: EM131583899

Question - Information from the books of Smith and Stone follows:

 

 Smith (in $ millions)

Stone (in $ millions)

Cash

$930

$13,279

Marketable securities

190

55

Accounts receivable

1,730

19,212

All other current assets

2,153

19,993

Total current liabilities

2,432

43,003

Total liabilities

4,796

74,282

Total equity

4,020

40,517

Pre-tax income

640

9,415

Interest expense

35

597

Complete the following:              

a. Calculate the current ratio and quick ratio for both companies.

b. Which company is more liquid?           

c. Calculate the times-interest-earned ratio and debt-to-equity ratio for both companies.

d. Which company is more solvent?

Reference no: EM131583899

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