Determine the quick ratio for both companies

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Reference no: EM13529527

The current assets and current liabilities for Apple Computer, Inc., and Dell Inc. are shown as follows at the end of a recent fiscal period:

 

Apple Computer, Inc.

Dell Inc.

 

(In millions)

(In millions)

 

Sept. 24, 2005

Feb. 3, 2006

Current assets:

 

 

Cash and cash equivalents

$ 3,491

$ 7,042

Short-term investments

4,770

2,016

Accounts receivable

895

4,089

Inventories

165

576

Other current assets*

979

3,983

Total current assets

$10,300

$17,706

Current liabilities:

 

 

Accounts payable

$ 1,779

$ 9,840

Accrued and other current liabilities

1,705

6,087

Total current liabilities

$ 3,484

$15,927

 

 

 

*These represent prepaid expense and other nonquick current assets.

a. Determine the quick ratio for both companies.

b. Interpret the quick ratio difference between the two companies.

Reference no: EM13529527

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