In 20x1, Telo Company had current assets of $310,000 and current liabilities of $200,000, of which accounts payable were $130,000. Cost of goods sold was $850,000, merchandise inventory increased by $40,000, and accounts payable were $110,000 in the prior year. In 20x2, Telo had current assets of $420,000 and current liabilities of $320,000, of which accounts payable were $150,000. Cost of goods sold was $950,000, and merchandise inventory decreased by $30,000. Calculate Telo's working capital, payables turnover, and average days' payable for 20x1 and 20x2. Assess Telo's liquidity and cash flows in relation to the change in payables turnover from 20x1 to 20x2. E-2