Financial Statement Ratios The following items, in alphabetical order, are available from the records of Quinn Corporation as of December 31, 2010 and 2009:

December 31, 2010 December 31, 2009 Accounts payable $10,500 $ 6,500 Accounts receivable 16,500 26,000 Cash 12,750 11,800 Interest receivable 200 0 Note receivable, due 12/31/2012 12,000 12,000 Offi ce supplies 900 1,100 Prepaid insurance 400 250 Salaries payable 1,800 800 Taxes payable 10,000 5,800 Required 1. Calculate the following as of December 31, 2010, and December 31, 2009:

a. Working capital

b. Current ratio 2. On the basis of your answers to (1), comment on the company’s relative liquidity at the beginning and end of the year. Explain the change in the company’s liquidity from the beginning to the end of 2010.

AppendixLO1