Question

Verizon Wireless

Balance Sheet Data (Partial) and Analysis

(In millions)

Current Year

Analysis

Prior Year

Analysis

Current assets

$         2,290

$            669

Current liabilities

2,257

2,172

Current ratio

1.01

0.31

Total liabilities

$         9,801

$         9,854

Total assets

5,131

6,200

Debt to assets ratio

1.91

1.59

If Verizon paid off $1 billion

of current liabilities with cash:

Current assets

Current liabilities

Current ratio

Total liabilities

Total assets

Debt to assets ratio

Answer 1

• The question states that $ 1 billion = $ 1,000 millions.

Current Assets will decrease by $ 1000 millions and hence Total assets will decrease by $ 1000 millions

Current Liabilities will decrease by $ 1000 million sand hence total liabilities will decrease by $ 1000 million

• Requirement completed:

	Current Year		Prior Year
Current assets	$                     2,290.00		$               669.00
Current liabilities	$                     2,257.00		$           2,172.00
Current ratio		1.01		0.31
Total liabilities	$                     9,801.00		$           9,854.00
Total assets	$                     5,131.00		$           6,200.00
Debt to assets ratio		1.91		1.59
If Verizon paid off $1 billion
of current liabilities with cash:
Current assets	$                     1,290.00		$             (331.00)
Current liabilities	$                     1,257.00		$           1,172.00
Current ratio		1.03		-0.28
Total liabilities	$                     8,801.00		$           8,854.00
Total assets	$                     4,131.00		$           5,200.00
Debt to assets ratio		2.13		1.70