Transcribed Image Text: 2020 2019 Current ratio Did the company’s ability to pay its current liabilities improve over the two years? Los Altos, Inc. Income Statement For Years Ended December

Transcribed Image Text: 2020
2019
Current ratio
Did the company’s ability to pay its current liabilities improve over the two years?
Los Altos, Inc.
Income Statement
For Years Ended December 31, 2020 and 2019
(in millions)
2020
2019
Net sales
$10,000 $9,500
Cost of goods sold
5,500
5,200
Gross profit
4,500
4,300
Selling and administrative expenses
2,800
2,700
Income from operations
1,700
1,600
Interest expense
300
250
Income before income taxes
1,400
1,350
Income tax expense
420
400
Net income
$980
$950
Los Altos, Inc.
Balance Sheet
December 31, 2020 and 2019
(in millions)
2020
2019
Assets
Current assets
Cash and cash equivalents
$200
$400
Accounts receivable
900
800
Inventory
500
650
Other current assets
400
250
Total current assets
2,000
2,100
Property. plant, & equipment (net)
2,600
2,500
Other assets
5,700
5,900
Total assets
$10,300 $10,500
Liabilities and Stockholders’ Equity
Current liabilities
$3,000
$2,900
Long-term liabilities
5,000
5,400
Total liabilities
8,000
8,300
Stockholders’ equity – common
2,300
2,200
Total Liabilities and Stockholders’ Equity $10,300 $10,500

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