3M Company reported the following financial data for 2009 and 2008 (in millions).
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3M COMPANY
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Balance Sheet (partial)
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Current assets
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2009
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2008
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Cash and cash equivalents
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$ 3,040
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$1,849
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$1,849
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Accounts receivable, net
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3,250
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3,195
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3,195
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Inventories
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2,639
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3,013
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3,013
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Other current assets
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1,866
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1,541
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1,541
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Total current assets
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$10,795
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$9,598
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$9,598
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Current liabilities
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$ 4,897
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$5,839
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$5,839
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Instructions
(a) Calculate the current ratio for 3M for 2009 and 2008.
(b) Suppose that at the end of 2009, 3M management used $300 million cash to pay off $300 million of accounts payable. How would its current ratio change?