The following financial data were reported by 3M Company for 2006 and 2007 (dollars in millions).
|
3M COMPANY |
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|
2007 |
2006 |
|
|
Current assets |
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|
Cash and cash equivalents |
$1,896 |
$1,447 |
|
Accounts receivable, net |
3,362 |
3,102 |
|
Inventories |
2,852 |
2,601 |
|
Other current assets |
1,728 |
1,796 |
|
Total current assets |
$9,838 |
$8,946 |
|
Current liabilities |
$5,362 |
$7,323 |
Instructions
(a) Calculate the current ratio and working capital for 3M for 2006 and 2007.
(b) Suppose that at the end of 2007 3M management used $200 million cash to pay off $200 million of accounts payable. How would its current ratio and working capital have changed?