Question

Current Position Analysis

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				$399,000			$317,200
Marketable securities				462,000			356,900
Accounts and notes receivable (net)				189,000			118,900
Inventories				693,000			483,700
Prepaid expenses				357,000			309,300
	Total current assets			$2,100,000			$1,586,000
Current liabilities:
Accounts and notes payable
	(short-term)			$406,000			$427,000
Accrued liabilities				294,000			183,000
	Total current liabilities			$700,000			$610,000

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.

Answer 1