Hello I am looking at the latest annual report for a company called Mosaic and I need help calculating the acid-test (quick) ratio for this company. If I understand correctly the formula to solve this is:

(Cash + Short Term Investments + Receivables (net) ) / Current Liabilities

My question is the following: I would like for someone to tell me: Are the components for the acid-test found only in current assets? If so, which of these accounts are the short term investments?

Current Assets:
Cash and cash equivalents
Receivables, net
Receivables from Cargill, Inc. and affiliates
Inventories
Deferred income taxes
Other current assets
Total Current Assets
Property, plant and equipment, net
Investments in non-consolidated companies
Goodwill
Other assets
Total Assets

Investments in non-consolidated companies is a long term asset so I am not sure whether or not to include in the acid-test ratio. Thanks in advance.

(Cash + Short Term Investments + Receivables (net) ) / Current Liabilities

My question is the following: I would like for someone to tell me: Are the components for the acid-test found only in current assets?

Yes. The equation is actually quick assets/current liabilities, with quick assets being cash, marketable securities and receivables. The idea is only including things that are cash or can be converted to cash fairly quickly. They would pretty much have to be current assets to even fit that definition. It's a sub-set of current assets.

In your list, you have no marketable securities. I'm not sure what the receivable from Cargill thing is. (Though I did some temporary for Cargill once, but I don't think that helps you. :D ) It's listed in current. There must be something "special" about it for them to list it separately from their other receivables. There might be something in the disclosure notes about it. But for the sake of a class situation and not really being able to expect a student to necessarily know a thing like that, I think I'd go ahead and include it. But that definitely is just an opinion.

Thank you for your help. I found another balance sheet at this website: MOS: Balance Sheet for MOSAIC COMPANY (THE) - Yahoo! Finance (http://finance.yahoo.com/q/bs?s=MOS&annual) which clearly show that the short term investments are zero.