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Compute Liquidity and Solvency Ratios for Competing Firms

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Reference no: EM133057851

Question - Compute Liquidity and Solvency Ratios for Competing Firms - Halliburton and Schlumberger compete in the oil field services sector. Refer to the following:

$ millions

HAL

SLB

Cash and equivalents

$2,008

$1,433

Short-term investments

-

1,344

Accounts receivable

5,339

8,039

Current assets

11,151

15,731

Current liabilities

4,898

13,756

Total liabilities

16,438

33,921

Total equity

9,735

37,318

Earnings before interest and tax (EBIT)

2,516

3,111

Interest expense, gross

554

537

Required -

a. Compute the following measures for both companies.

1. Current ratio

2. Quick ratio

3. Times interest earned

4. Liabilities-to-equity

b. Which company appears more liquid?

c. Which company appears more solvent?

Reference no: EM133057851

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