The Office-to-Go Furniture Company had the following current assets and liabilities for two comparative years:

a. Determine the quick ratio for December 31, 2006 and 2005.
b. Interpret the change in the quick ratio between the two balance sheetdates.

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Dec. 31, 2006 Dec. 31, 2005 Current assets: Cash Accounts receivable Inventory $ 356,000 400,000 800,000 $1,556,000 530,000 350,000 500,000 $1,380,000 Total current assets Current liabilities: Current portion of long-term debt Accounts payable Accrued expenses payable $150,000 570,000 180,000 $ 900,000 $150,000 450,000 200,000 800,000 Total current liabilities