Question

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				$330,600			$260,000
Marketable securities				382,800			292,500
Accounts and notes receivable (net)				156,600			97,500
Inventories				957,000			701,500
Prepaid expenses				493,000			448,500
	Total current assets			$2,320,000			$1,800,000
Current liabilities:
Accounts and notes payable
	(short-term)			$336,400			$350,000
Accrued liabilities				243,600			150,000
	Total current liabilities			$580,000			$500,000

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