Short-Term Liquidity Ratios
The financial statements for Puck Enterprises, a retailer, follow.
Puck Enterprises
Consolidated Income Statements
(millions of dollars except per share data)
December 31
2023 2022 2021
Revenues $19,233 $17,927 $16,115
Costs and expenses: Cost of retail sales, buying, and occupancy $14,164 $13,129 $11,751
Selling, publicity, and administration 3,175 2,978 2,801
Depreciation 498 459 410
Interest expense, net 446 437 398
Taxes other than income taxes 343 313 283
Total costs and expenses $18,626 $17,316 $15,643
Earnings before income taxes $607 $611 $472
Provision for income taxes 232 228 171
Net earnings $375 $383 $301
Puck Enterprises
Consolidated Balance Sheets
(millions of dollars)
December 31,
2023 2022
ASSETS
Current assets:
Cash and cash equivalents $521 $117
Accounts receivable 1,536 1,514
Merchandise inventories 2,497 2,618
Other 267 165
Total current assets $4,821 $4,414
Property and equipment:
Land $2,480 $998
Buildings and improvements 4,753 4,342
Fixtures and equipment 1,982 2,197
Construction-in-progress 248 223
Accumulated depreciation (2,336) (2,197)
Net property and equipment $7,127 $5,563
Other 320 587
Total assets $12,268 $10,564
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $200 $23
Accounts payable 1,654 1,347
Accrued liabilities 903 849
Income taxes payable 145 160
Current portion of long-term debt 173 371
Total current liabilities $3,075 $2,750
Long-term debt 4,279 4,771
Deferred income taxes and other 536 450
Loan to ESOP (217) (267)
Total liabilities $7,673 $7,704
Stockholders' equity:
Preferred stock 368 374
Common stock 72 71
Additional paid-in capital–common 73 58
Retained earnings 4,082 2,357
Total stockholders' equity $4,595 $2,860
Total liabilities and stockholders' equity $12,268 $10,564
Required:
1. Compute the four short-term liquidity ratios (rounded to two decimal places) for 2022 and 2023, assuming operating cash flows are $394 million and $501 million, respectively. Round your answers to two decimal places.
2023 2022
Current ratio Quick ratio Cash ratio Operating cash flow ratio 2. Conceptual Connection: Indicate which ratio appears to be most appropriate for a retail organization.