Quick ratio OBJ. 6 Nabors Company reported the following current assets and liabilities for December 31 for two recent years:

Dec. 31, Current Year Dec. 31, Previous Year 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 of both years.

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