Question

Suppose the following financial data were reported by Jason Inc. for 2016 and 2017 (dollars in millions).

Jason Inc. Balance Sheets (partial)
		2017		2016
Current assets
Cash and cash equivalents		$3,050		$1,818
Accounts receivable, net		3,560		3,185
Inventories		2,729		3,036
Other current assets		1,872		1,618
Total current assets		$11,211		$9,657
Current liabilities		$4,833		$5,872

Calculate the current ratio and working capital for Jason Inc. for 2016 and 2017.

Current ratio 2016: _________________ :1 2017:__________________: 1 Working Capital 2016: $____________________ Million 2017: $____________________ Million

Answer 1

PARTICULARS/ DATE	2016	2017
Total Current Assets	$9657	$11211
Current Liabilities	$5872	$4833

CURRENT RATIO: Current ratio is a ratio between Current Assets and current liabilities. It is calculated by dividing Current assets by Current liabilities.
2016: (Current Assets / Current Liabilities) => ( $9657 / $5872) => 1.64:1
2017: ( Current Assets / Current Liabilities) => ( $11211 / $4833) => 2.32:1

WORKING CAPITAL: Working capital is that capital which is used to deal with day to day need of business so that business can run smoothly without interruption. It is calculated by subtracting Current Liabilities from Current Assets.
2016: (Current Assets- Current Liabilities) => ($9657 - $5872) => $3785 Million
2017: (Current Assets - Current Liabilities) => ( $11211 - $4833) => $6378 Million