Sherwood, Inc.,the parent company of Frito-Lay snack foods and Sherwood beverages, had the following current assets and current liabilities at the end of two recent years:

Current Year

(in millions)Previous Year

(in millions)Cash and cash equivalents$4,105$4,427Short-term investments, at cost2,9168,221Accounts and notes receivable, net9,2698,432Inventories2,7152,716Prepaid expenses and other current assets9051,004Short-term obligations3623,844Accounts payable8,6888,556

a.Determine the (1)current ratioand (2)quick ratiofor both years. Round to one decimal place.

Current YearPrevious Year1.Current ratio2.Quick ratio

b.The liquidity of Sherwood hasincreased

some over this time period. Both the current and quick ratios haveincreased

. Sherwood is astrong

company withample

resources for meeting short-term obligations. Its liquidity as measured by the current and quick ratios hasimproved

during this period.