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$419,500$336,000Marketable securities485,800378,000Accounts and notes receivable (net)198,700126,000Inventories303,600146,400Prepaid expenses156,40093,600Total current assets$1,564,000$1,080,000Current liabilities:Accounts and notes payable(short-term)$266,800$280,000Accrued liabilities193,200120,000Total current liabilities$460,000$400,000

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$fill in the blank 1

$fill in the blank 2

2.Current ratiofill in the blank 3

fill in the blank 4

3.Quick ratiofill in the blank 5

fill in the blank 6

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.