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				$543,700			$418,900
Marketable securities				716,100			494,300
Accounts and notes receivable (net)				881,600			594,800
Inventories				1,035,800			801,100
Prepaid expenses				512,200			498,100
	Total current assets			$3,689,400			$2,807,200
Current liabilities:
Accounts and notes payable (short-term)				$935,300			$773,400
Accrued liabilities				354,700			386,600
	Total current liabilities			$1,290,000			$1,160,000

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

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

   			Current Year			Previous Year
   1. Working capital
   2. Current ratio
   3. Quick ratio

2. The liquidity of Nilo has

   (improved or declined)

   from the preceding year to the current year. The working capital, current ratio, and quick ratio have all

   (increased or decreased)

   . Most of these changes are the result of a(n)

   (increase or decrease)

   in current assets relative to current liabilities.