Working Capital and Current Ratio

The following data (in thousands) were taken from recent financial statements of Starbucks Corporation:

	Year 2		Year 1
Current assets	$124,157		$89,925
Current liabilities	32,933		24,370

a. Compute the working capital and the current ratio for Year 2 and Year 1. Enter working capital amounts in thousands of dollars. Round "current ratio" answers to two decimal places.

	Year 2	Year 1
Working capital	$fill in the blank 1	$fill in the blank 2
Current ratio	fill in the blank 3	fill in the blank 4

b. What conclusions concerning the company's ability to meet its financial obligations can you draw from part (a)? Starbucks' working capital

increaseddecreased

from Year 1 to Year 2 by $fill in the blank 6. Starbucks's current ratio

increaseddecreased

in Year 2. The changes in working capital and current ratio indicate that short-term creditors

should beshould not be

concerned about receiving payment from Starbucks.