Sherwood, Inc., had the following current assets and current liabilities at the end of two recent years:

	Year 2 (in millions)		Year 1 (in millions)
Cash and cash equivalents	$4,380		$4,502
Short-term investments, at cost	3,111		8,361
Accounts and notes receivable, net	9,889		8,575
Inventories	1,304		1,739
Prepaid expenses and other current assets	434		643
Short-term obligations (liabilities)	348		3,692
Accounts payable and other current liabilities	8,229		7,527

a. Determine the (1) current ratio and (2) quick ratio for both years. Round to one decimal place.

	Year 2	Year 1
Current ratio	fill in the blank 1	fill in the blank 2
Quick ratio	fill in the blank 3	fill in the blank 4

b. What conclusion can be drawn from these data?

1.Sherwood's liquidity position has improved during the period.

2. Sherwood's liquidity position has deteriorated during the period.