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At the end of 2015, Apple had cash and short-term investments of $41.86 billion, accounts receivable...

At the end of 2015, Apple had cash and short-term investments of $41.86 billion, accounts receivable of $35.74 billion, current assets of $89.83 billion, and current liabilities of $80.38 billion. a. What was Apple's current ratio? b. What was Apple's quick ratio? c. What was Apple's cash ratio? d. At the end of 2015, HPQ had a cash ratio of 0.29, a quick ratio of 0.66 and a current ratio of 1.06. What can you say about the asset liquidity of Apple relative to HPQ?

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Expert Solution

Given that
i cash and short-term investments $41.86
ii accounts receivable 35.74
iii current assets 89.83
iv=iii-i-ii Inventory $12.23
v current liabilities 80.38
ans a) What was Apple's current ratio
current ratio = Current asset / Current liabilities
iii/v         1.12
ans b) What was Apple's quick ratio
(Current asset - Inventory)/Current liabilities
(iii-iv)/v         0.97
ans c) What was Apple's cash ratio
Cash and short term investment/Current liabilities         0.52
i/v
ans d) Apple HPQ
Current ratio         1.12 1.06
Quick ratio         0.97 0.66
Cash ratio         0.52 0.29
we can see that all the ratios of HPQ is lower than Apple
Therefore apple has higher liquidty as compared to HPQ

jeff jeffy answered 2 years ago
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