The following financial data were reported by 3M Company for 2007 and 2008 (dollars in millions).
|
2008 |
2007 |
|
|
Current assets |
||
|
Cash and cash equivalents |
$1,849 |
$1,896 |
|
Accounts receivable, net |
3,195 |
3,362 |
|
Inventories |
3,013 |
2,852 |
|
Other current assets |
1,541 |
1,728 |
|
Total current assets |
$9,598 |
$9,838 |
|
Current liabilities |
$5,839 |
$5,362 |
Instructions
(a) Calculate the current ratio and working capital for 3M for 2007 and 2008.
(b) Suppose at the end of 2008, 3M management used $300 million cash to pay off $300 million of accounts payable. How would the current ratio and working capital have changed?