Bauman Company’s total current assets, total current liabilities, and inventory for each of the past four years follow:

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 2019–2022 period.

c. If you were told that Bauman Company’s inventory turnover for each year in the 2019–2022 period and the industry averages were as follows, would this information support or conflict with your evaluation in part b? Why?

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Item Total current assets Total current liabilities Inventory 2019 $16,950 9,000 6,000 2020 $21,900 12,600 6,900 2021 $22,500 12,600 6,900 2022 $27,000 17,400 7,200