The following table contains current asset and current liability balances for Microsoft Corporation (MSFT):

	2013		2012		2011
Cash and cash equivalents	9,045,000		6,195,000		7,179,000
Short-term investments	13,875,000		17,322,000		26,223,000
Net receivables	15,021,000		13,113,000		10,880,000
Inventory	884,000		940,000		1,238,000
Other current assets	2,466,000		2,143,000		2,492,000
Total current assets	41,291,000		39,713,000		48,012,000
Accounts payable	12,646,000		6,070,000		8,881,000
Short-term/current long-term debt	0		2,788,000		0
Other current liabilities	16,583,000		14,410,000		13,492,000
Total current liabilities	29,229,000		23,268,000		22,373,000

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a.Assume that you are the lead banker for the syndicate of banks that manage Microsoft Corporation's line of credit. Your boss has asked that you report to him on the current state of Microsoft's liquidity. How would you describe the liquidity of Microsoft in 2013?

b.Have there been recent changes in Microsoft's liquidity? If so, have the changes been to improve the firm's liquidity? Explain your observations.

a.Firm liquidity refers to the ability of the firm to pay its bills in a timely fashion. Which of the following ratios measure a firm's liquidity?(Select the best choice below.)

A.Return on equity and return on assets.

B.Net working capital and current ratio.

C.Debt ratio and times interest earned ratio.

D.Earnings per share and dividend per share.