22

Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years:

A) Determine the quick ratio for December 31 of both years.

B) Interpret the change in the quick ratio between the two balance sheet dates.

Current Year Previous Year Current assets: Cash Accounts receivable Inventory $486,000 210,000 375,000 $1,071,000 500,000 200,000 350,000 $1,050,000 Total current assets Current liabilities: Current portion of long-term debt Accounts payable Accrued and other current liabilities $ 145,000 175,000 260,000 $580,000 110,000 150,000 240,000 $500,000 Total current liabilities