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While checking the Liquidity of company Z for the last 3 years 2018, 2019 and 2020 you noticed the followings: 1. The current ratio was

While checking the Liquidity of company Z for the last 3 years 2018, 2019 and 2020 you noticed the followings:

1. The current ratio was decreasing while the quick ratio was increasing over time. 2. The ROE ratio (Net Income/Average total Equity) materially increased although the sales and the net income margin was almost the same.

As a financial analyst kindly explain the above two issues.

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