Quick ratio Obj. 7 Nabors Company reported the following current assets and current liabilities for two recent years:

Dec. 31, 20Y8 Dec. 31, 20Y7 Cash $ 650 $ 680 Temporary investments 1,500 1,550 Accounts receivable 700 770 Inventory 1,250 1,400 Accounts payable 2,375 2,000

a. Compute the quick ratio on December 31 for each year. Round to one decimal place.

b. Interpret the company’s quick ratio. Is the quick ratio improving or declining?

AppendixLO1