SHORT-TERM LIQUIDITY RATIOS Below are three ratios calculated for Huey, Louie, and Dewey Companies for 2008 and 2009.

(In millions) Huey Louie Dewey Current ratio 12/31/09 2.8 to 1 2.3 to 1 1.8 to 1 12/31/08 2.0 to 1 1.5 to 1 2.2 to 1 Inventory turnover ratio 12/31/09 6.9 times 5.8 times 8.0 times 12/31/08 7.6 times 5.8 times 9.6 times Quick ratio 12/31/09 2.5 to 1 2.1 to 1 0.5 to 1 12/31/08 1.0 to 1 1.4 to 1 1.2 to 1 Required:

Explain which company appears to be the most liquid.

Cornerstone Exercise