Question

Suppose the following selected condensed data are taken from a recent balance sheet of Bob Evans Farms (in millions of dollars).

Cash $ 31.9
Accounts receivable 21.0
Inventory 28.1
Other current assets 23.0
Total current assets $104.0
Total current liabilities $200.0

Answer 1

The answer is

1. -$96 million

2. 0.52:1

Step-by-step explanation:

1. Working capital = total current assets - total current liabilities

Current assets:

Cash. $ 31.9 million

Accounts receivable $21.0 million

Inventory $28.1 million

Other current assets. $23.0 milllion

Total current assets $104.0 million

And current liabilities is$200.0 million

Therefore, working capital is:

$104 - $200

= -$96 million

2. Current ratio = current assets/current liabilities

$104 million / 200 miliion

=0.52:1