1. What is a limitation common to both the current and quick ratio?

A.Prepaid expenses are potential sources of cash.

B.Accounts receivable may not be truly liquid.

C.Inventories may not be truly liquid.

D.Marketable securities are not liquid.

2.

Use the following information to answer the question: Cash & cash equivalents 2,106 PP & E 12,138 Accounts receivable 2,632 Long-term debt 4,477 Other long-term liabilities 2,067 Shareholders' equity 19,454 Equity method investments 9,059 Prepaid expenses 284 Accounts payable 4,635 Inventories 6,852 Net sales 72,217 Interest expense 165 Short-term borrowings 570 Deferred tax liabilities 600 Cost of goods sold 51,098 Tax expense 1,445 Interest income 120 SG & A expenses 17,179 Goodwill 2,410 Accrued expenses 3,678