Current Position Analysis

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

Current YearPrevious YearCurrent assets:Cash$556,300$445,200Marketable securities644,200500,900Accounts and notes receivable (net)263,500166,900Inventories805,200517,300Prepaid expenses414,800330,700Total current assets$2,684,000$1,961,000Current liabilities:Accounts and notes payable(short-term)$353,800$371,000Accrued liabilities256,200159,000Total current liabilities$610,000$530,000

a.Determine for each year (1) theworking capital, (2) thecurrent ratio, and (3) thequick ratio. Round ratios to one decimal place.

Current YearPrevious Year1.Working capital$$2.Current ratio3.Quick ratio

b.The liquidity of Nilo has

from the preceding year to the current year. The working capital, current ratio, and quick ratio have all

. Most of these changes are the result of an

in current assets relative to current liabilities.