Suppose the following financial data were reported by3M Companyfor 2013 and 2014 (dollars in millions)
|
3M COMPANY Balance Sheets (partial) |
||
|
2014 |
2013 |
|
|
Current assets |
||
|
Cash and cash equivalents |
$ 3,040 |
$1,849 |
|
Accounts receivable, net |
3,250 |
3,195 |
|
Inventories |
2,639 |
3,013 |
|
Other current assets |
1,866 |
1,541 |
|
Total current assets |
$10,795 |
$9,598 |
|
Current liabilities |
$ 4,897 |
$5,839 |
Instructions
(a)Calculate the current ratio and working capital for 3M for 2013 and 2014.
(b)Suppose that at the end of 2014, 3M management used $200 million cash to pay off $200 million of accounts payable. How would its current ratio and working capital have changed?