Calculate the quick ratio for Los Altos, Inc., for both years, using the financial statements displayed below. Round to nearest hundredth.

$20202019$ Quick Ratio

Did the company$$s ability to pay its current liabilities improve over the two years? Answer

Los Altos, Inc. Income Statement For Years Ended December $31,2020$ and $2019($in millions$)20202019$ Net sales $$5,500$ $$5,225$ Cost of goods sold $2,7502,600$ Gross profit $2,7502,625$ Selling and administrative expenses $1,4001,350$ Income from operations $1,3501,275$ Interest expense $150125$ Income before income taxes $1,2001,150$ Income tax expense $210200$ Net income $$990$ $$950$

Los Altos, Inc. Balance Sheet December $31,2020$ and $2019($in millions$)20202019$ Assets Current assets Cash and cash equivalents $$100$ $$200$ Accounts receivable $450400$ Inventory $250325$ Other current assets $200125$ Total current assets $1,0001,050$ Property, plant, & equipment $($net$)1,3001,250$ Other assets $2,8502,950$ Total assets $$5,150$ $$5,250$ Liabilities and Stockholders' Equity Current liabilities $$1,800$ $$1,740$ Long$-$term liabilities $3,0003,240$ Total liabilities $4,8004,980$ Stockholders' equity $-$ common $350270$ Total Liabilities and Stockholders' Equity $$5,150$ $$5,250$