Suppose the following financial data were reported by 3M Company for 2019 and 2020 (dollars in millions). 3M Company Balance Sheets (partial) 2020 2019 Current assets Cash and cash equivalents $ 3,008 $1,833 Accounts receivable, net 3,055 3,100 Inventories 2,630 3,012 Other current assets 1,820 1,506 Total current assets $10,513 $9,451 Current liabilities $ 4,988 $5,830 (a) Calculate the current ratio and working capital for 3M for 2019 and 2020

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Business

Helena Andrade

2 July, 09:22

Suppose the following financial data were reported by 3M Company for 2019 and 2020 (dollars in millions). 3M Company Balance Sheets (partial) 2020 2019 Current assets Cash and cash equivalents $ 3,008 $1,833 Accounts receivable, net 3,055 3,100 Inventories 2,630 3,012 Other current assets 1,820 1,506 Total current assets $10,513 $9,451 Current liabilities $ 4,988 $5,830 (a) Calculate the current ratio and working capital for 3M for 2019 and 2020

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William Christensen · Answer 1

Current ratio

2019 1.62

2020 2.11

Working capital:

2019 $3,621

2020 $5,525

Explanation:

The current ratio formula = current assets/current liabilities

2019:

current assets is $9451

current liabilities=$5,830

current ratio = $9451/$5,830 = 1.62

working capital = current assets-current liabilities=$9451-$5830=$3621

2020

current assets is $10513

current liabilities=$4988

current ratio = $10513/$4988 = 2.11

working capital = current assets-current liabilities=$10,513-$4,988=$5525