The fiscal 2016 balance sheet for Whole Foods Market reports the following data (in millions). Cash and Cash Equivalents Marketable Securities Accounts Receivable Merchandise Inventories Current Assets Current Liabilities $351 $379 $242 $517 $1,975 $1,341 What is the company's current ratio? A. 0.69 B. 1.38 C. 0.72 D. 1.47 E. None of the above

Option C 0.72 is correct

Explanation:

Cash and cash equivalents351

Marketable securities         379

Accounts receivable         242

Total quick assets                 972

Divide by Current liabilities1341

Quick ratio                         0.72

D. 1.47

Explanation:

The data are limped and should be separated first as follows:

Cash and Cash Equivalents = $351

Marketable Securities = $379

Accounts Receivable = $242

Merchandise Inventories = $517

Current Assets = $1,975

Current Liabilities = $1,341

To calculate the company's current ratio w divide the current assets by current liabilities as follow:

Current ratio = $1,975/$1,341 = 1.47

Therefore, the company's current ratio 1.47. And since it greater than 1, it implies the company will not have problems meeting its short-term debt obligation.

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