ick Ratio angel Company reported the following current assets and liabilities fo

Question

ick Ratio angel Company reported the following current assets and liabilities for December 31 for two recent years Dec. 31, Current Year Dec. 31, Previous Year ash emporary investments Accounts receivable Inventory Accounts payable a. Compute the quick ratio on December 31 of both years. If required, round your answers to one decimal place. $770 1,680 1,750 1,260 3,500 $570 1,270 860 1,220 2,700 Quick Ratio December 31, current year December 31, previous year b. Is the quick ratio improving or declining?

Explanation / Answer

a Quick ratio Dec 31 Current year 1.2 =(770+1680+1750)/3500 Dec 31 Previous year 1.0 =(570+1270+860)/2700 b The quick ratio is improving

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