Current Position Analysis Sherwood, Inc , the parent company of Tasty snack foods and Super beverages, had the following current assets and current liabilities at the end of two recent years Current Year (in millions) Prior Year (in millions) Cash and cash equivalents $3,986 $4,344 Short term investments, at cost 2,831 8,067 Accounts and notes receivable, net 9,001 8,274 Inventories 2,157 1,438 Prepaid expenses and other current assets 719 532 Short term obligations 288 3,054 Accounts payable and other current liabilities 6,809 6,225 Income taxes payable 93 571 a Determine the (1) current ratio and (2) quick ratio for both years Round to one decimal place Current Year Prior Year 1 Current ratio 2 Quick ratio b The solvency of Sherwood has SelectincreaseddecreasedItem 5 some over this time period Both the current and quick ratios have SelectincreaseddecreasedItem 6 Sherwood is a SelectstrongweakItem 7 company with SelectampleinsufficientItem 8 resources for meeting short term obligations Its solvency as measured by the current and quick ratios has SelectimproveddeterioratedItem 9 during this period

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Current Position Analysis Sherwood, Inc., the parent company of Tasty snack foods and Super beverages, had the following current assets and current liabilities at the

Current Position Analysis

Sherwood, Inc., the parent company of Tasty snack foods and Super beverages, had the following current assets and current liabilities at the end of two recent years:

	Current Year (in millions)	Prior Year (in millions)
Cash and cash equivalents	$3,986	$4,344
Short-term investments, at cost	2,831	8,067
Accounts and notes receivable, net	9,001	8,274
Inventories	2,157	1,438
Prepaid expenses and other current assets	719	532
Short-term obligations	288	3,054
Accounts payable and other current liabilities	6,809	6,225
Income taxes payable	93	571

a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place.

	Current Year	Prior Year
1. Current ratio
2. Quick ratio

b. The solvency of Sherwood has SelectincreaseddecreasedItem 5 some over this time period. Both the current and quick ratios have SelectincreaseddecreasedItem 6 . Sherwood is a SelectstrongweakItem 7 company with SelectampleinsufficientItem 8 resources for meeting short-term obligations. Its solvency as measured by the current and quick ratios has SelectimproveddeterioratedItem 9 during this period.