In: Accounting
The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:
Current Year | Previous Year | |||||||
Current assets: | ||||||||
Cash | $458,700 | $347,200 | ||||||
Marketable securities | 531,100 | 390,600 | ||||||
Accounts and notes receivable (net) | 217,200 | 130,200 | ||||||
Inventories | 1,546,400 | 1,134,600 | ||||||
Prepaid expenses | 796,600 | 725,400 | ||||||
Total current assets | $3,550,000 | $2,728,000 | ||||||
Current liabilities: | ||||||||
Accounts and notes payable | ||||||||
(short-term) | $411,800 | $434,000 | ||||||
Accrued liabilities | 298,200 | 186,000 | ||||||
Total current liabilities | $710,000 | $620,000 |
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
Current Year | Previous Year | |||||
1. Working capital | $ | $ | ||||
2. Current ratio | ||||||
3. Quick ratio |
b. The liquidity of Nilo has from the preceding year to the current year. The working capital, current ratio, and quick ratio have all . Most of these changes are the result of an in current assets relative to current liabilities.