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Question:
give answer in 3 steps with explanation at the end of each step and final answer at the end :
& i hp HES ig =
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This is AI generated Response.
Asked by: Test User 100230
Created at: 2025-05-18 22:32:05
Asked by: Test User 100230
Created at: 2025-05-18 22:32:05
Final Answer:
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Let's break down the **three steps** to solve the problem, as requested.
---
### **Step 1: Gather the Required Data**
#### **Explanation:**
We need the following information from the balance sheets (from the first image):
- **Working capital** = Current Assets - Current Liabilities
- **Current ratio** = Current Assets / Current Liabilities
- **Acid-test ratio** = (Cash + Short-term investments + Net receivables) / Current Liabilities
Let’s extract these figures for **September 26, 2020** and **September 28, 2019**:
#### **From the balance sheet:**
| | 2020 | 2019 |
|----------------|--------------|--------------|
| Current Assets | $143,713 M | $162,819 M |
| Current Liab. | $105,392 M | $105,718 M |
| Cash & Equiv. | $38,016 M | $48,844 M |
| Short-term Inv.| $52,920 M | $51,713 M |
| Net Rec. | $16,120 M | $23,186 M |
---
### **Step 2: Calculate the Ratios**
#### **Explanation:**
**a) Working Capital:**
\[
\text{Working Capital} = \text{Current Assets} - \text{Current Liabilities}
\]
- 2020: $143,713 - $105,392 = $38,321$ M
- 2019: $162,819 - $105,718 = $57,101$ M
**b) Current Ratio:**
\[
\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}}
\]
- 2020: $143,713 / 105,392 = 1.36$
- 2019: $162,819 / 105,718 = 1.54$
**c) Acid-test Ratio:**
\[
\text{Acid-test Ratio} = \frac{\text{Cash \& Equiv. + Short-term Inv. + Net Rec.}}{\text{Current Liabilities}}
\]
- 2020: $(38,016 + 52,920 + 16,120) / 105,392 = 107,056 / 105,392 = 1.02$
- 2019: $(48,844 + 51,713 + 23,186) / 105,718 = 123,743 / 105,718 = 1.17$
---
### **Step 3: Fill in the Table and Interpret**
#### **Explanation:**
Now, fill in the answers:
| | 2020 | 2019 |
|----------------|-----------|-----------|
| Working cap. | $38,321 M | $57,101 M |
| Current ratio | 1.36 | 1.54 |
| Acid-test ratio| 1.02 | 1.17 |
**Interpretation:**
There is a decrease in working capital, current ratio, and acid-test ratio from 2019 to 2020. This suggests a decline in the company's short-term liquidity and ability to cover its immediate obligations.
---
### **Final Answer (Summary Table):**
| | 2020 | 2019 |
|----------------|-----------|-----------|
| Working cap. | $38,321 M | $57,101 M |
| Current ratio | 1.36 | 1.54 |
| Acid-test ratio| 1.02 | 1.17 |
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