1. Year-end balance sheet data (shown in thousands of dollars) for MamaMia Soup Company is as follows:

Category	Year 1	Year 2
Cash and cash equivalents	$94	$63
Short-term investments	2	7
Accounts receivable (net)	578	646
Property, plant, and equipment (net)	2,401	2,265
Current liabilities	1,465	1,851
Long-term liabilities	1,338	1,343

1. Explain the significance of the quick ratio. How do decision makers use this ratio when interpreting a companys financial statements?
2. Compute MamaMias quick ratio for both years. Based strictly on these ratios, in which year was the companys liquidity position stronger? Show your calculations in a table.
3. If the average quick ratio in MamaMias industry is 1.2, is the companys quick ratio better or worse than the industry norm?
4. Identify at least three factors that could account for MamaMias quick ratio being signifcantly different from the industry norm.

2. Macys Inc. is the parent company of Macys and Bloomingdales department stores. Use Macys annual report for 2013 to answer the following questions. The annual report can be found at investors.macysinc.com. Click on Financial Information, Annual Reports/Fact Book, and 2013 Annual Report. Some of the information you need is contained in the footnotes, so look carefully.

Answer the following questions for the fiscal year 2013:

1. Does Macys still have an in-house (proprietary) credit card? Explain.
2. What was the balance on February 2, 2014, in accounts receivable?
3. What is the average balance in accounts receivable?
4. What is the total of Macys net sales for 2013?
5. Assume that net sales is equivalent to net credit sales. Calculate the accounts receivable turnover ratio and the age of receivables ratio. Comment on the results.
6. What is the amount of Macys cash and cash equivalents at February 2, 2014? How does Macys determine what to classify with this account?

Year-end balance sheet data (shown in thousands of dollars) for MamaMia Soup Company is as follows:

Category	Year 1	Year 2
Cash and cash equivalents	$94	$63
Short-term investments	2	7
Accounts receivable (net)	578	646
Property, plant, and equipment (net)	2,401	2,265
Current liabilities	1,465	1,851
Long-term liabilities	1,338	1,343

1. Explain the significance of the quick ratio. How do decision makers use this ratio when interpreting a companys financial statements?
2. Compute MamaMias quick ratio for both years. Based strictly on these ratios, in which year was the companys liquidity position stronger? Show your calculations in a table.
3. If the average quick ratio in MamaMias industry is 1.2, is the companys quick ratio better or worse than the industry norm?
4. Identify at least three factors that could account for MamaMias quick ratio being signifcantly different from the industry norm.