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	$2,955		$2,855
Short-term investments, at cost	2,099		5,302
Accounts and notes receivable, net	6,672		5,439
Inventories	1,353		1,805
Prepaid expenses and other current assets	451		667
Short-term obligations	361		3,832
Accounts payable and other current liabilities	8,542		7,811
Income taxes payable	117		717

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.

Check My Work (2 remaining)