The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:

				Current Year			Previous Year
Current assets:
Cash				$385,900			$300,000
Marketable securities				508,300			354,000
Accounts and notes receivable (net)				625,800			426,000
Inventories				1,559,000			1,082,100
Prepaid expenses				771,000			672,900
	Total current assets			$3,850,000			$2,835,000
Current liabilities:
Accounts and notes payable (short-term)				$725,000			$600,000
Accrued liabilities				275,000			300,000
	Total current liabilities			$1,000,000			$900,000

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round the ratios to one decimal place and the working capital to the nearest dollar.

			Current Year			Previous Year
1. Working capital
2. Current ratio
3. Quick ratio

b. The liquidity of Nilo has improved/declined from the preceding year to the current year. The working capital, current ratio, and quick ratio have all increase/decrease. Most of these changes are the result of a(n) increased/decreased in current assets relative to current liabilities.