Quick Ratio

Calculate the quick ration for Smith & Sons Inc for 2015 and 2016 and comment on the companys working capital position. Did the companys ability to pay its current liabilities improve over the two years?

Quick ratio = (cash and cash equivalents + Short term investments + Accounts receivable)/Current Liabilities

Smith & Sons, Inc
Balance Sheet
Decemober 31, 2016 and 2015
(In millions)		2016	2015
Assets
Current assets
Cash and cash equivalents		200	400
Accounts receivable		900	800
Inventory		500	650
Other Current assets		400	250
Total Current assets		2000	2100
Property, plant & equipment (net)		2,600	2,500
Other Assets		5,700	5,900
Total assets		10,300	10,500
Labilities and Stockholders'e Equity
Current Liabilites		3,000	2,900
Long-term liabilities		5,000	5,400
Total Labilities		8,000	8,300
Stockholders's equity-common		2,300	2,200
Total Labilities and Stockholders' Equity		10,300	10,500