uick ratios The Gap Inc. (GPS) operates specialty retail stores under such brand names as GAP, Old Navy, and Banana Republic. The following asset and liability data (in millions) were adapted from recent financial statements. Year 2 Year 1 Current assets: Cash Accounts receivable Inventory Prepaid and other current assets Total current assets Total current liabilities $1,783 $1,783 202 335 1,997 1,830 506 367 $4,568 $4,315 $2.461 $2,453 American Eagle Outfitters Inc. (AEO) operates specialty retail stores, selling clothing such as denim, sweaters, t-shirts, and fleece outerwear that targets 15-to-25-year-old men and women. The following asset and liability data (in millions) were adapted from recent financial statements. Year 2 Year 1 Current assets: Cash 5414 $379 Accounts receivable 79 67 Inventory 398 358 Prepaid and other current assets 78 78 Total current assets $968 1902 Total current liabilities $485 $494 Compare The Gap Inc. and American Eagle Outfitters Inc. liquidity positions for Year 2. Although The Gap has the quick assets of American Eagle Outfitters, it has the current liabilities. By using the quick ratios, the effects of the differences in size of the companies be mitigated. In this case, American Eagle's quick ratio compared to The Gap's quick ratio suggests that American Eagle is in a liquidity position