Provide a brief definition of what liquidity ratios mean to the profitability of a company. What are the differences between Samsung and Apple in relationship to each of the ratios?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Liquidity Ratios

  1. Provide a brief definition of what liquidity ratios mean to the profitability of a company.
  2. What are the differences between Samsung and Apple in relationship to each of the ratios?
  3. What do the ratios mean to the company’s profitability?  Is it good or bad?
SAMSUNG 2019
Current Assets
155,634
155,634.00
Current Ratio
2.84
%3D
Current Liabilities
54,727
54,727.00
Current Assets - Inventory - Prepaids
Current Liabilities
155,634
54,727
22,966
132,668.00
54,727.00
Acid Test (Quick Ratio)
2.42
%3D
APPLE INC 2019
162,819
Current Assets
Current Liabilities
162,819.00
105,718.00
Current Ratio
1.54
105,718
Current Assets - Inventory - Prepaids
Current Liabilities
4,106
162,819
105,719
158,713.00
105,719.00
Acid Test (Quick Ratio)
1.50
Transcribed Image Text:SAMSUNG 2019 Current Assets 155,634 155,634.00 Current Ratio 2.84 %3D Current Liabilities 54,727 54,727.00 Current Assets - Inventory - Prepaids Current Liabilities 155,634 54,727 22,966 132,668.00 54,727.00 Acid Test (Quick Ratio) 2.42 %3D APPLE INC 2019 162,819 Current Assets Current Liabilities 162,819.00 105,718.00 Current Ratio 1.54 105,718 Current Assets - Inventory - Prepaids Current Liabilities 4,106 162,819 105,719 158,713.00 105,719.00 Acid Test (Quick Ratio) 1.50
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