Solutions to Problems P2-1. Liquidity management 20092010 2011 1.79 1.24 2012 Current ratio Quick ratio Net working capital S7950$9.300 $9,900 1.88 1.22 1.74 1.19 1.55 1.14 $9,600 The pattern indicates a deteriorating liquidity position. The decline is most pronounced for the current ratio which includes inventory The low inventory turnover suggests that liquidity is even worse than the declining liquidity measures indicate. Slow inventory turnover may indicate obsolete inventory b. c. glish (UK) Solutions to Problems P2-1. Liquidity management 20092010 2011 1.79 1.24 2012 Current ratio Quick ratio Net working capital S7950$9.300 $9,900 1.88 1.22 1.74 1.19 1.55 1.14 $9,600 The pattern indicates a deteriorating liquidity position. The decline is most pronounced for the current ratio which includes inventory The low inventory turnover suggests that liquidity is even worse than the declining liquidity measures indicate. Slow inventory turnover may indicate obsolete inventory b. c. glish (UK)