Kendra Massey is trying to decide how to invest a recent windfall inheritance. Because she considers herself a fashionista, her first thought was to look at two of her favorite stores, Nordstrom and Macy's. Kendra visited each company's website and calculated the following ratios based on the financial statements she found there. She also found some industry averages to use as a comparison.

Required
a. Which of the two companies has the stronger liquidity position?
b. How do the companies' positions compare to the industry averages?

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Macy's Nordstrom Industry Average 2015 1.90 0.50 2014 1.70 0.60 2015 2014 2015 1.04 0.27 2014 Current ratio Acid-test ratio Accounts receivable 1.34 0.29 1.69 0.53 1.87 1.12 turnover 55.2 times 65.2 times11.3 times5.9 times 40.8 times 56.4 times Average collection period 6.6 days 5.6 days 32.3 days 61.9days 8.9 days 6.5 days Inventory turnover3.02 times 3.07 times499tmes 5.15 times 3.20 times 4.10 times Average days to sell inventory 120.9 days 118.9 days 73.1 days 70.9 days 114.1 days 88.8 days