a. Calculate the firm's current and quick ratios for each year. Compare the resulting time series for these measures of liquidity. b. Comment on the firm's liquidity over the 2016-2019 period.
Bauman Company's total current assets, total current liabilities, and inventory for each of the past
4 years follow:
Item 2016 2017 2018 2019
Total current assets $17,230 $21,720 $22,390 $26,190
Total current liabilities 8,860 12,370 13,560 17,120
Inventory 5,650 6,930 7,340 7,560
a. Calculate the firm's current and quick ratios for each year. Compare the resulting time series for these measures of
liquidity.
b. Comment on the firm's liquidity over the 2016-2019 period.
c. If you were told that Bauman Company's inventory turnover for each year in the - period and the industry
averages were as follows, would this information support or conflict with your evaluation in part (b).? Why?
2016 2019
Item 2016 2017 2018 2019
Bauman Company 6.3 6.8 7.0 6.4
Industry Average 11.4 12.0 11.6 11.8
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