1. Current Position Analysis

   The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:

   				Current Year			Previous Year
   Current assets:
   Cash				$491,000			$401,200
   Marketable securities				568,500			451,400
   Accounts and notes receivable (net)				232,500			150,400
   Inventories				493,700			251,900
   Prepaid expenses				254,300			161,100
   	Total current assets			$2,040,000			$1,416,000
   Current liabilities:
   Accounts and notes payable
   	(short-term)			$394,400			$413,000
   Accrued liabilities				285,600			177,000
   	Total current liabilities			$680,000			$590,000

   a. Determine for each year (1) the The excess of the current assets of a business over its current liabilities.working capital, (2) the A financial ratio that is computed by dividing current assets by current liabilities.current ratio, and (3) the A financial ratio that measures the ability to pay current liabilities with quick assets (cash, temporary investments, accounts receivable), computed as quick assets divided by current liabilities.quick ratio. Round ratios to one decimal place.

   			Current Year			Previous Year
   1. Working capital	$			$
   2. Current ratio
   3. Quick ratio

   b. The liquidity of Nilo has

   • improved
   • declined
   from the preceding year to the current year. The working capital, current ratio, and quick ratio have all
   • increased
   • decreased
   . Most of these changes are the result of an
   • increase
   • decrease
   in current assets relative to current