Chapter 14, Problem 14.6EX

Current position analysis

The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:

	Current Year	Previous Year
Current assets:
Cash	$ 414,000	$ 320,000
Marketable securities	496,800	336,000
Accounts and notes receivable (net)	619,200	464,000
Inventories	351,900	272,000
Prepaid expenses	188,100	208,000
Total current assets	$2,070,000	$ 1,600,000
Current liabilities:
Accounts and notes payable (short-term)	$ 675,000	$ 600,000
Accrued liabilities	225,000	200,000
Total current liabilities	$ 900,000	$ 800,000

• A. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. (Round ratios to one decimal place.)

B. What conclusions can be drawn from these data as to the company's ability to meet its currently maturing debts?